Meetings need to take place between milk processors and their suppliers who signed up to fixed-price contracts given the huge increases that have occurred across various inputs, according to independent TD Michael Fitzmaurice.
In the past few months, the cost of meal, diesel, fertiliser and energy prices have rocketed – with fertiliser almost trebling in price compared to 12 months ago. This has left dairy farmers who signed up to fixed-price contracts in a significantly difficult position.
Commenting on the matter, Fitzmaurice said: “I have spoken to farmers who signed up to these contracts at a base price of 31 cent per liter in late 2020 or early 2021. Currently, the base price is at approximately 40 cent per liter.
“But no one could have envisaged the leap in costs across critical inputs in the past few months. This time last year, 31 cent per liter was sustainable – but now it is no where near adequate.
“The fact is that some milk suppliers face the real danger of going to the wall due to the quantity of milk they have tied into this contract.
“I am calling on all of the processors to meet with their suppliers who are tied into these contracts and who have been hit hardest by the surge in input costs.
“Workable compromises need to be reached. Otherwise, these processors will see some of their suppliers go out of business,” Fitzmaurice concluded.
For further information contact Michael Fitzmaurice at 086-1914565