Shortage of milk could be in store for winter, warns IFA

Milk could soon be in short supply in supermarkets in the winter months as a result of a combination of Brexit and low prices being paid to producers, the Irish Farmers’ Association (IFA) has warned.

It also called for the re-introduction of the ban on low-cost selling of milk and for the negative impact of “cut-throat competition” to be brought under control by a newly-created ombudsman who would oversee the grocery sector.

Speaking at the launch of a new strategy document on Tuesday morning, IFA president Joe Healy said milk produced during the winter will soon fail to meet demand which could lead to shortages.

He said 90 per cent of Ireland’s dairy farmers produce milk on a seasonal basis for commodities, mainly for export while fresh milk for the supermarket shelf is produced 365 days a year by 1,800 specialists dairy farmers - around 10 per cent of the total.

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“Traditionally, there has been a price premium for farmers who milk all year round, but their margin has been eroded in recent years,” said Mr Healy.

Supply pressures

He warned that supply pressures could be "exacerbated" by Brexit with 26 per cent of milk on supermarket shelves in the Republic currently coming from Northern Ireland.

"When I started in liquid milk production in 1984, it was a profitable farming enterprise, with brands dominating the market and the largest volumes sold door to door," said the IFA's national liquid milk chairman John Finn.

“Things have changed. Supermarket private labels sourced through price-based tenders now dominate sales. The cut-throat competition for market share between dairies and retailers has eroded margins to unsustainable levels”.

He called for an end to one-year tenders favoured by large retailers saying such short-term contracts made for “dysfunctional commercial relations and result in wild swings in supply arrangements, which neither farmers nor dairies can cope with”.

He also called for the reintroduction of below cost-selling, and the creation of a “well-resourced and independent” ombudsman’s office “to stamp out unfair trading practices and secure a sustainable margin for primary producers.”