Dairy farmers have seen their margin over costs completely eroded over the last 16 months. Describing Tuesday’s GDT auction price rise as “a line in the sand”, indicating a bottoming out of global dairy markets, IFA dairy chair Sean O’Leary said that processors must focus on immediately ending “16 months of continuous cuts in milk price”.

While prices have fallen by 33% since May 2014, O’Leary says that margin has fallen by 92%.

“Teagasc’s production costs [which the IFA used in its calculations] do not include farmers’ own labour or investment repayments, so it is clear that many farmers are now producing milk at a very significant loss,” said O’Leary.

O’Leary welcomed support from processors for the IFA’s campaign to secure improved intervention supports and for superlevy funds to be used to support the dairy sector.

“However, it would be much more helpful if [processors] also put an immediate stop to milk price cuts now volumes are dwindling, and looked to internal efficiencies and joint projects, including mergers, to reduce their costs and optimise their ability to pay the strongest possible milk price,” said O’Leary.

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