FURTHER cuts of four cents per litre in the March milk price – confirmed by Arrabawn this week – will bring margins for dairy farmers down close to cost-of-production levels, according to Connacht IFA Chair, Pat Murphy.

The Ardrahan dairy farmer – himself a supplied to Arrabawn – told the Farming Tribune that since the start of the year, prices will now have dropped by 16c/l.

Arrabawn confirmed earlier this week that they were cutting March milk prices by 4c/l, bringing the price down to 44.19c/l inclusive of VAT at 3.6% and at 3.3% protein.

The co-op said that they were continuing to pay the highest possible price that the market would allow but pointed to ‘weaker global market conditions’ as the reason for the cut.

Lakeland have also confirmed a 4c/l cut in prices (down to 42.85c/l), the same reduction as the Kerry Group, whose base price has now dropped to 40c/l.

Pat Murphy said that an independent report from the Ifac farm business group had pointed out that a price of 40c/l was needed just to cover the production costs.

“Margins have been cut to the bone since the start of the year – down by 16c/l – a price trend that will force farmers out of business if it continues,” he said.

For more, read this week’s Connacht Tribune.

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