Published: Wednesday, 17th February, 2010 5:00pm

Minimum liquid milk price is 35c - IFA

The newly elected IFA Liquid Milk chairman Padraig Mulligan with IFA Dairy Committee executive secretary Catherine Lascurettes and out-going Liquid Milk chairman Eamonn Bray.

Thirty-five cent a litre. That's the absolute minimum annualised liquid milk price required for producers to break even and pay themselves a modest wage, according to the newly elected IFA National Liquid Milk Committee chairman Padraig Mulligan.

He said he would work hard to obtain recognition of the need for liquid milk producers to receive a fairer share of the retail returns from dairies, and would participate fully in the IFA campaign to obtain Equity for Farmers in the Food Supply Chain.

"The average retail price of liquid milk today is around 91c/l, up seven per cent on what it was three years ago. Producer prices, on the other hand, are down around three per cent, with dairies currently talking them down even further. I'm incensed at dairies raiding farmers' pockets to give away margins to retailers in a futile attempt to gain market share at one another's expense, and I am even more furious at retailers' demands, which disregard the viability of milk producers," Mr. Mulligan said.

"In 2010, we estimate the cost of producing liquid milk all year-round will be at least 30c/l, before paying the farmer any remuneration at all for his or her labour, and the best paying liquid milk dairies (Clona, Connacht Gold and Glanbia) are just about paying this at the moment," Mr. Mulligan added.

"There's clearly a need for all dairies to increase their milk price, most of all the lower paying dairies such as Kerry and Arrabawn whose annualised liquid milk price is barely above 26c/l.

"We in the IFA have calculated that to pay an extremely modest wage to the producer, an annualised liquid milk price of 35c/l minimum is required. This is five cent a litre more than the best dairies are currently paying. However, to receive the average industrial wage, a 300,000-litre supplier, who produces 50% of his milk as liquid, would need to receive 42c for every litre of liquid milk produced.

"That's a whopping 12c/l more than the best paid liquid milk producers currently receive, and it still does not provide for any return on investment," he added.

"There is something radically wrong when consumers are paying more for their milk, yet farmers are being denied a viable milk price in a bid to boost the margins of retailers and dairies. As the new IFA Liquid Milk Committee chairman, I am totally committed to challenging the share out of the food chain margins with both dairies and retailers," he concluded.

With his wife Mary and son Padraig Óg, Padraig Mulligan supplies Connacht Gold from Templeboy, Co. Sligo.