The figures compiled by the Irish Creamery Milk Suppliers Association (ICMSA) make for stark reading, with association president Pat McCormack saying they spell “disaster for the rural economy”.

Earlier this month Dairygold became the latest processor to slash its July quoted milk price by 2 c/pl to 36 c/pl, with a spokesperson saying that “global milk markets continue to weaken due to pressure on demand in key markets, with no sign of near-term correction.”

To put the scale of reductions in milk prices over the past 12-months into context, in June of last year Dairygold was paying its milk suppliers 55.5c/pl.

This represents a year-on-year reduction of just over 35%.

The ICMSA said that steady decline in milk prices has seen dairy farmers across the country take a €2 billion hit in revenues, with Cork bearing the brunt of this.

Their figures showed that in 2022 milk revenues in Cork totalled €1,269,394.000. According to the ICMSA the revenue figure for 2023 currently stands at €777,865,000 – a reduction of €491,529,000 or 38.7%.

The ICMSA has carried out a detailed analysis of each of the 26 counties to establish the reduction in revenues earned by dairy farmers over the last two years.

Results show the dramatic drops in milk values with almost €2 billion less expected to be paid to dairy farmers in 2023 against 2022

Describing this as being “an astounding amount to lose”, ICMSA president Pat McCormack said it was going to have a “very serious impact”, not just on dairy farmers but also on the wider rural economy this year and in 2024 as farmers tighten their purse strings and make sweeping cuts to their spending.

“We all know that spend in their local communities and many local services and companies are dependent on farmers. It comes no surprise to see the spending power of dairy farmers dramatically deteriorate and this is being reported by businesses across rural communities that provide goods and services to dairy farmers and the wider dairy industry,” said Mr McCormack.

“From concrete to shed suppliers, to milking equipment to farm machinery, the reports coming back is that dairy farmers have stopped buying and investing, only the very basics are being purchased and this is going to have a dramatic impact on the local economy,” he added.

Mr McCormack said that with an outlet multiplier of two for dairy, the total loss to the Irish rural economy for 2023 could be as high as €4 billion

“At county level, we see the largest reduction occurring in Cork with almost half a billion of a reduction while Tipperary will lose almost quarter of a billion in direct revenues. These counties have large processors, and this is where the multiplier effect can bite even harder with so many indirect jobs depending on the dairy sector,” said Mr McCormack.

The ICMSA analysis used an average overall milk price if 59cpl for 2033 and an expected average price of 37cpl for 2023, with production expected to fall by 2% years-on-year given the prevailing weather and price conditions.

“This means that almost 38% of dairy revenues have been wiped away in the space of 12 months and this analysis does not include the very severe cost elements facing dairy farmers, meaning that dairy farm incomes will be severely hit in 2023,” said Mr McCormack.

“While fertiliser has reduced somewhat, most fertiliser was purchased early in the year or last year at inflated prices and unfortunately, electricity and feed remain stubbornly high,” he added.

Mr McCormack called on the Minister for Agriculture, Food & Marine, Charlie McConalogue to convene a meeting of the Dairy Forum so that a “clear strategy could be put in place” to kick-start an immediate recovery in milk price.

“This is needed not just by the farmers who produce the milk on a daily basis but also the wider rural businesses that are dependent on it for their revenues,” said Mr McCormack