The President of ICMSA, Denis Drennan, said that the steep fall in production figures for 2023 was down to several factors including milk price being below the cost of production and extremely difficult weather conditions that had cows being housed earlier than normal. But he also confirmed that there was no doubt that new nitrates restrictions including cow banding and the reduction to 220 N per hectare from 1 January 2024 were very significant factors.
Describing Ireland’s official dairy policy as incoherent, Mr Drennan said that that the reduction combined with ‘Cow Banding’ was effectively working as a destocking policy, something, he noted, that the Irish Government had repeatedly undertaken not to introduce. Mr Drennan said that milk prices that had “hovered” at or below the cost of production had forced farmers to cut production, particularly in a context where farmers were unconvinced that any concerted attempts were being prepared to lower input costs.
The ICMSA President said that as the leader of a farmer organisation, his priority was the income of his farmer-members, but he said that that it was self-evident that the question of volumes for those Co-ops that had invested heavily in modern processing facilities was going to become an issue.
Put simply, he said that if Co-ops want milk, they are going to have to pay for it.
“Obviously, you’d think that competition for milk supply is going to drive up milk price, but the corollary is that these Co-ops have very significant farmer shareholding and the real danger here is that while milk price might rise, the value of farmer shareholdings in these Co-ops could fall as the markets look at the falling volumes against the processing capacity.
“It’s very frustrating for ICMSA and Ireland’s dairy farmers because we think that this is an entirely false binary – an entirely unnecessary ‘Either/Or’ – we believe that it was and is entirely possible to match production volumes to scientifically proven sustainability targets as well as carefully calculated processing capacity.
“Our Government’s policy has disconnected all three and actually set them against each other. Our challenge – which we continue to work for – is the reconnect all three elements and the first element must be a consistent and sustainable milk price that allows dairy farmers to produce the necessary volumes,” said Mr Drennan.