28 September 2016

1 minute read

Europe

Sean O’Leary warned against complacency, saying while milk prices have started recovering, they have a long way to go to make up for a prior 27 month slump, which has taken a severe toll on farmers’ margins. 

“Dairy markets are rallying strongly, and this is welcome and badly needed after 27 months of uninterrupted milk price falls. However, farmers have received only between 1.5 and 2.5c/l more for their milk in the last two months, which still leaves them well below their production costs,” he said.

“While dairy farm incomes turned out better than feared in 2015, this was down to higher volumes and lower feed costs due to good production conditions in that year. When you analyse the margins, however, you realise that farmers were not able to remunerate their own labour for most of 2015,” he said.

“2016 was worse again for farmers, because prices fell well below the costs of production from spring, and accumulated bills have been weighing heavily on their cash flow throughout the year. Many of those bills – merchant credit, superlevy, utility, tax – are coming due now – so action from the Minister is urgent,” he concluded.

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