ICMSA, the state’s specialist dairy farmer association, has released figures illustrating the financial shock that could be suffered by Cork and Limerick dairy farmers through the next 12 months due to collapse in farmer milk price that began in August and is continuing – albeit at a slower pace.
ICMSA president, Denis Drennan, said that, nationally, approximately €1.3 billion will be wiped out directly in dairy farmer income across the state with a directly resultant ‘hit’ in the order of almost €3 billion as the milk revenue went ‘out the farm gates’ and was multiplied into the wider rural communities.
“Rural Ireland runs on milk. It’s the fuel; it’s the basis for prosperity, not just for the farmer-producers, but for the whole host community as it goes out the farm gates and into the contractors, machinery, services, feed and all the other services and merchants supplying into it. The standard multiplier effect is 2.3 and when you apply that to the already sobering figures of €1.3 billion you begin to see the kind of economic hit that a collapse in milk price inflicts on the state as a whole.
“But you can take a great milk-producing region like Cork and Limerick – where ICMSA has thriving local executives – and see that direct farmer income will be down by nearly €320 million in Cork and around €99 million in Limerick with around €960 million less in the local rural economies when we take that ‘farm income multiplier’ into account.
“The economists estimate that dairy income can be multiplied by 2.3 as it goes ‘out the gate’ and into local contractors, machinery providers, local feed merchants, local finance & insurance, etc. The kind of income ‘wipeout’ that we’re seeing on the basis of these price falls – where the price farmers are receiving is now below the costs of production – becomes disastrous in counties like Cork and Limerick as that multiplier effect drops in proportion to milk price. Remember that Cork accounts for nearly 25% of all the milk that’s produced in the state, with Limerick at 7.5%,” said Mr Drennan.
Interestingly, the ICMSA data shows that milk supply has increased significantly in 2025 despite dairy cow numbers falling by their largest number since the turn of the century and for the first time since 1999, there has been two years of consecutive falls. The analysis also shows that over the last five years, we have seen both volume and cow numbers stabilise in comparison to the growth phase of the previous decade, and it’s now possible to see the full extent of volatility that is happening to dairy farming incomes. The average revenues come in at €4 billion per annum over the last six years but the deviation from the mean is at €800m; an uncontrollable level of volatility in a sector that is showing such stability in production.
“Dairy farmers need to plan for their revenues to be either 20% higher or lower than the average. But even that means that in you could have a 40% swing in income over two successive years. We’re heading for 35% drop in milk income for this year compared to last. How does anyone plan or budget on the basis of that? It’s impossible,” he declared.
Mr Drennan said that these kinds of milk price collapses have occurred previously, most notably during the eerily similar 2016 milk price collapse and on that occasion ICMSA and the other constituent members of the European Milk Board (EMB) had lobbied for the introduction of a EU-wide Voluntary Supply Reduction Scheme which incentivised farmers to reduce milk production and which had an ‘overnight’ effect on milk price.
“It ‘put a floor’ under the market and the reality of lower volumes brought the buyers back into the market immediately to buy forward and secure supply. ICMSA and the other specialist dairy associations right across the EU want this scheme taken back ‘off the shelf’ and reintroduced to effect a similar price stabilisation and then recovery,” said the ICMSA president.
Minister Heydon has to go to the Commission and Council of Ministers and point to the dairy farmer ‘wipeout’ being experienced across the EU. When he calls for a Voluntary Supply Reduction Scheme he’s going to find a lot of receptive ears because EMP has already briefed the other ministers on this real, relatively cheap, and ready-to-go option that worked successfully before and can work again,” continued Mr Drennan.
Pointing out that time is of the essence here, Mr Drennan said we need that ‘floor’ put under the market and recovery to begin before peak production and certainly no later than the end of April.
“It has to happen – and it has to happen now, or we’ll just see hundreds of millions of Euro disappear from dairy farmer income and from the wider rural economies that depend so heavily on our dairy sector,” he concluded.
