The Irish Creamery Milk Suppliers Association (ICMSA) has used recent Central Statistics Office (CSO) figures to highlight that Irish farmers are being caught in the ‘costs-price squeeze’.
The squeeze, that sees input costs surging while the output prices received fall or at best remain constant, has turned farmers growing efforts into increasing losses.
“The first thing we notice is that the Agricultural Input Index increased by 6.3% from December 2017 to December 2018 while the corresponding Agricultural Output Price Index was down by 3.1% over the same period,” President of the ICMSA, Pat McCormack, said.
“Milk price … was down by in excess of 10% in that period, but if we look across to the inputs paid by those same milk producers, we see energy costs up 5.4%, while fertilisers are up overall by 9.7% and veterinary costs up by over 3.1%. Feedstuffs alone went up overall by 10.8%.
Surging Costs
McCormack said that, in the context of output prices being under pressure, this is very significant input inflation at a time when low inflation and relatively low-interest rates are commonplace in today’s media.
“While farmer prices either remain constant, see-saw or even fall significantly; our inputs costs only ever go in one direction and that’s upwards at a continuous and constant rate,” McCormack continued.
“Over any set period, the record shows that net farmer incomes are being eaten into year-on-year by the Government’s inability or unwillingness to face up to the reasons behind this inexorable rise in farm input costs and some of the very well financed and influential groups that seem to be able to increase their own prices without any objection being voiced by anyone except the farmers paying.”
McCormack concluded by arguing that output prices are going to have to increase, and at a much higher rate, if farming “as we know it” is to continue.
“It’s simply not good enough to tell farmers that they should be happy with output prices they received ten or twenty years ago when their input costs are rising at the rate the Government’s own CSO figures confirm”, concluded McCormack.
© 2019 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.
