Food prices are getting “completely out of the control”, a dairy farmer has said.
The price of milk and butter has fallen in certain supermarkets this week and Louise Crowley said market competition is to blame.
Speaking to Pat Kenny, Ms Crowley said: “We don't have the control of setting what price we get for our milk.”
“They tell us monthly: ‘This is what you're getting’,” she said.
“It's determined by global trade and supermarkets and a lot of other factors that are completely out of our control.
“The same goes for the inputs that we have to purchase to produce our products on our farm.”
‘Why has the price fallen?’
Irish Independent personal finance editor Charlie Weston said the price decrease is due to a very competitive environment with the big supermarket chains.
“They're watching each other like a hawk, they price matching all the time,” he said.
“Particularly Lidl and Aldi are in expansion mode, they're very anxious to maintain or increase their market share.”
Mr Weston said it is also due to a fall in global commodity prices.
“The likes of oil, wheat prices, for example, are at a two-year low,” he said.
“Palm oil, fertiliser animal feed, those prices have stabilised so that we'll probably end up seeing supermarkets demanding or paying less to farmers.”
A checkout desk in an Irish supermarket. Picture by: Holger Burmeister / Alamy Stock Photo‘The price of inputs’
Ms Crowley said in the last two years, the price of inputs has been going up dramatically, but milk prices haven't been correlating with it.
“What took six months last year to get a substantial increase in milk price was demolished in the space of two months this year,” she said.
“We are well behind on what we were getting last year and that would be all right, but our inputs have not come down anywhere as significant.
“We still have to spend the same amount of money to produce the product, but we're actually getting less income to actually keep our farm and our families going.”
‘The cost for the customer’
Minister of State for Employment Affairs and Retail Business, Neale Richmond, said there had been concern about the “average cost of the grocery bill going up extremely high.”
“For most people across Ireland staple products have gone up consistently higher,” he said.
“There's a bit of a concern that it's going higher –this time last year was 10% inflation, that's back down to 5%.
“We have seen an increase in profits for certain supermarket chains as well as certain producers within it.
“The costs for the producer, for the farmer, have gone up but the return is potentially diminishing the cost for the customer in the supermarket.
Mr Richmond said the Government are working on establishing a balance, where there is no scope for profiteering, but ultimately both the consumer and farmer benefit.
“The wider competition you have in any industry, but particularly supermarkets, it does bring down the overall price,” he said.
“What our big concern is making sure that inflation hasn't been used as an excuse by people to rack up prices for certain staples, therefore pushing up the average grocery bill to what is a really worrying amount.”
