National: €2bn hit for dairy farmers is a 'disaster for rural economy' - ICMSA

TWO BILLION euro from dairy farmers revenue will be wiped out due to milk price reductions so far in 2023. 

What has been described as having a ‘very serious impact’ on both dairy farmers as well as rural communities, the losses will continue to hit those affected ‘well into 2024’, according to the ICMSA, the Irish Creamery Milk Suppliers Association. 

The ICMSA has carried out a detailed analysis of each of the 26 counties to establish the reduction in revenues earned by dairy farmers over the last two years.  

Results show the dramatic drops in milk values with almost €2 billion less expected to be paid to dairy farmers in 2023 versus 2022.

“2023 has seen very severe cuts to milk price throughout the course of the year and it comes as no surprise to see the spending power of dairy farmers dramatically deteriorate,” said Mr. Pat McCormack, President of ICMSA.  

“From concrete to shed suppliers, to milking equipment to farm machinery, the reports coming back is that dairy farmers have stopped buying and investing, only the very basics are being purchased and this is going to have a dramatic impact on the local economy.” 

Addressing the figures from 2022 in comparison to 2023, Mr McCormack said: “This is an astounding amount to lose [€2bn] from the rural economy, as we all know that farmers spend in their local communities and many local services and companies are dependent on farmers.

“With an output multiplier of two for dairy, the total deficit from the Irish rural economy could be €4 billion for 2023. While fertiliser has reduced somewhat, most fertiliser was purchased early in the year or last year at inflated prices and unfortunately, electricity and feed remain stubbornly high.”

The ICMSA analysis used an average milk price of 59cpl for 2022 and an expected average price of 37cpl for 2023, with production expected to fall by 2% year on year, given the weather and price conditions prevailing at present. This means that almost 38% of dairy revenues have been wiped away in the space of 12 months.

At county level, we see the largest reduction occurring in Cork with almost half a billion of a reduction while Tipperary will lose almost quarter of a billion in direct revenues.

The ICMSA now calls on the Minister for Agriculture, Food & Marine to immediately convene a meeting of the Dairy Forum so that a clear strategy can be put in place to ‘kickstart’ an immediate recovery in milk price.