Irish dairy farmers have said that they can no longer absorb milk products’ cost of production, RTÉ reported this week.
This means that consumers will be faced with pay rises on items such as milk, cheese and butter, to meet these high production costs.
Irish dairy cows produce over eight billion litres of milk each year, but in the past 12 months, the cost of wholesale dairy production has risen by almost 20%.
Recent figures from the Central Statistics Office (CSO) show that between February of this year and the same month in 2024, the average price of two litres of full-fat milk has risen by 26 cent, to €2.44.
Meanwhile, Irish cheese per kilogram has risen by 50 cent, reaching €11.41, and a pound (454g) of butter has gone up by 70 cent, to €4.43.
‘Increased Exponentially’
Speaking about the rising prices, the president of the Irish Creamery Milk Suppliers’ Association, Denis Drennan, said, “We’ve probably gotten people into a bad habit because the price of food hasn’t increased in line with inflation.
“Anybody living in the cities or towns of Ireland, their cost of living has gone up – inflation has increased the price of their gas or oil, fuel for their car, their electricity bills.
“The same thing has happened on farms.
“My cost of production has increased exponentially in the last number of years, and the farmer can no longer sustain those costs.
“Those costs are going to have to be borne by consumers in the future.”
‘Can No Longer Absorb The Costs’
Drennan added that “very few young people” are entering dairy farming, due to uncertainty.
A report from Teagasc reported last year that farms saw a steep reduction in income in 2023, with the average dairy farm’s income decreasing by 69%, compared to 2022.
Drennan said that, in addition to the cost of living, environmental pressures were also weighing on the sector.
He said, “Whether it be biodiversity, water quality, [or] greenhouse gas emissions, it’s a very uncertain sector as regards what’s coming down the line.
“We will have to implement certain measures on our farms. We’re willing to do it, but a lot of these come at a cost.
“Farmers can no longer absorb the costs. It’s going to have to be reflected on supermarket shelves.”
The price of production has also been impacted by global trade.
Increased environmental regulation in the global market will likely keep dairy supplies suppressed, according to a professor of agriculture and food economics at University College Dublin, Michael Wallace.
Speaking about the global market, Wallace said, “Producers of dairy products in this country have a choice of a variety of markets they can supply those products to.
“The domestic market is actually a very small part of the overall demand.
“For Irish dairy products, 90% is exported, so prices are very much driven by global factors, and we experience that at a local level.”
Read More: Irish Inflation Rose By 1.8% In 12 Months To February – CSO
