'State of emergency' as Laois dairy farmers face project €64 million income reduction this year

Milk price reductions are projected to leave Laois dairy farmers almost €65 million out of pocket this year. 

That’s according to the Irish Creamery Milk Suppliers Association(ICMSA) who say dairy farmers nationwide are facing a €2 billion reduction in income this year. 

ICMSA President Pat McCormack said the reduction in income has reduced spending in rural communities by possibly double that amount. This, he said, 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.  

Mr McCormack said dairy farmers have experienced severe spending cuts resulting in a reduction of spending by dairy farmers in rural Ireland.  

This is being reported by businesses across rural communities that provide goods and services to dairy farmers and the wider dairy industry, according to the 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.  

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,” the ICMSA stated.   

“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,” said Mr McCormack. 

The 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 would mean 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.  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.  

In conclusion, Mr McCormack said the milk price reductions have been very severe and will have a massive impact on dairy farmer income in 2023 and he called on the Minister for Agriculture, Food and 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.

Laois Offaly TD Carol Nolan described the projected figures as “apocalyptic and profoundly stark”.

“What this data reveals is an absolute state of emergency within the Irish dairy sector,” said Deputy Nolan.

“In Offaly the losses in milk revenue for 2023 when compared to 2022 are in the order of a staggering €46.5 million, while the losses for Laois are even more troubling coming in at €64.6 million.”

“I wholeheartedly agree with the call that the ICMSA have made for the Minister for Agriculture to convene a meeting of the Dairy Forum so that a clear strategy can be put in place.”

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“From the evidence presented today it is clear that our once thriving dairy sector is in a state of freefall. We must initiate actions to stop it from collapsing entirely,” concluded Deputy Nolan.