Longford dairy farmers hit with €27M reduction in milk revenue

Longford dairy farmers will have to cope with over €27M reduction in milk revenue this year. The latest figures from the ICMSA suggest that tumbling milk prices will see Irish farmers experience a €2bn fall in revenue in 2023.

ICMSA President, Pat McCormack, says the fall in milk prices has wide reaching implications: “The milk price reductions so far in 2023 will wipe €2 billion from dairy farmers revenues in 2023 and in turn has reduced spending in rural communities by possibly double that amount and this is going to have a very serious impact not only on the dairy farmers themselves but on the wider rural economy in 2023 and well into 2024.”

This year has seen “severe cuts” to milk price: “It comes as no surprise to see the spending power of dairy farmers dramatically deteriorate and this is being reported by businesses across rural communities that provide goods and services to dairy farmers and the wider dairy industry,” Mr McCormack said, “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.”

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

The ICMSA President spoke of the repercussions of this decline: “This is an astounding amount to lose 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.”

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 and this analysis does not include the very severe cost elements facing dairy farmers, meaning that dairy farm incomes will be severely hit in 2023,” Mr McCormack said, “While fertilizer 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 President spoke of the implications around Ireland: “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. These counties have large processors and this is where the multiplier effect can bite even harder with so many indirect jobs depending on the dairy sector.”

The ICMSA data suggests that Longford dairy farmers will see Milk Revenue drop by €27,251,943 from €70,555,705 in 2022 to €43,303,762 in 2023. Neighbours Cavan will go from €137M to €86.5M, Roscommon from €34.5M to €22.6M, and Westmeath go from €107M to €67M.

Mr McCormack concluded by saying the milk price reductions have been “very severe” and will have “a massive impact” on dairy farmer income in 2023: “I am calling 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 which is needed by the farmers who produce the milk on a daily basis but also the wider rural businesses that are dependent on it for their revenues.”