Dairy farmers, who tend to operate at a considerably higher stocking rate than drystock farmers, have been badly affected by the drought this summer, with many finding that their feed bills have doubled due to the limited availability of grass and fodder.
In addition, farm milk prices were reduced in the first half of 2018, and are likely to be back about 10pc on last year’s levels.
Some dairy farmers are contemplating herd size reductions as a means to limit their feed bills.
Nationally, milk production, which had been set to continue to increase in 2018, is now likely to contract slightly, relative to the 2017 level, according to Teagasc.
Comparing the July 2018 milk produce figures with those for July 2017 shows that total milk sold for human consumption decreased by 2.4pc to 43.8 million litres while butter production was also down 3.9pc to 23,000 tonnes.
IFA National Dairy Committee Chairman Tom Phelan has said that co-ops had taken fright earlier this summer and been overly conservative in just holding base milk prices, some making do with temporary “support” payments which could readily be whipped out.
He said that Kerry Group’s CEO Eamonn Scanlon and Glanbia’s CEO Siobhan Talbot have recently expressed confidence in the market place. This must lead to higher milk prices from August supplies, he said.
