Irish farms’ cost-of-living crisis: ‘Retailer cuts will drive small farmers out of the market’

Dairy farmer Kieran O’Brien is up every morning and on the yard before 6am. He milks cows first, before eating breakfast, and then proceeds to tackle other tasks including spreading fertiliser.

Now, however, that early morning start is less enticing than ever before, with production costs remaining high and selling prices being reduced.

“It’s difficult to get up in the morning when you know you’re going to be working all day for nothing,” he said.

On Wednesday, representatives of supermarket chains, smaller stores and the grocery industry attended a meeting of the Retail Forum at the Department of Enterprise to discuss the continued high cost of groceries despite a general decline in inflation.

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Retailers have said their costs remain high and that price cuts will be implemented where possible. In recent weeks, retailers have announced a reduction in the price of butter and milk, with bread becoming the latest staple set to see a price reduction after Tesco announced it would cut the cost of its own-brand bread by 10 cent.

While the move has been welcomed by consumers and politicians, many farmers and food producers have expressed concern about the impact this will have on the viability of their businesses.

Mr O’Brien, who is the chairman of the Meath Irish Creamery Milk Suppliers’ Association, said business is quite difficult for farmers at the moment, and the potential for milk prices to be reduced further will create additional challenges for farmers.

“That is the fourth month in a row now that the cost of milk has dropped from the co-op price. Every time you drop a cent that we get, the closer you get to the break-even point. We’re definitely at the break-even point now,” he said.

“Thirty-seven cent is the base price now for milk produced in April. We’re down at the cost of production for most brands, and that’s the problem.”

Mr O’Brien said the price of meal and fertiliser have “bounced back a bit” after experiencing high levels of inflation. However, “the ESB? Our unit hasn’t dropped at all”.

He said there was a similar situation about 10 years ago, when business was really difficult, but they are just trying to keep going.

“It’s hard going but you just try to work your way through, use your overdraft in the bank to get out of it, but it’s hard going, especially when you know you’re not going to have any margin left for yourself,” he added.

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For David O’Sullivan in Skerries, however, prices have gone up to such an extent that he decided to end his career in farming 10 days ago.

The former farmer took over Skerries Organic Farm three years ago, which sells crops, seasonal produce and duck and hen eggs. However, the rising price of feed and electricity over the past six months meant the business was becoming unviable.

He had a second job in Irish Rail to supplement his income, which he worked at during the mornings, before working on the farm in the evenings.

“I looked at our books last year and realised we’re not making a lot of money. Then in March, I looked at the books again and realised I was practically killing myself working just to pay bills. It was barely paying the bills,” he said.

Supermarket prices are already much lower than those for produce they sold in their farm shop, he said, with members of the public opting for better value options in the face of the cost-of-living crisis. His retired father-in-law is trying to keep the doors of the farm shop open for the “time being” but there remains viability concerns, he said.

He added: “If the Government makes retailers cut prices, it’s just going to drive small farmers out of the market, purely because of the cost.”