Milk wars: Tirlan vs the IFA

Michael Bergin charts the course of what has been a year-long dispute over fixed milk price contracts.

The change of face that was signified by the “Tirlán” rebranding in September 2022, has not proven to be a recipe for stability and conflict avoidance, it seems. Not long after the Irish agrifood industry welcomed its freshest face, it was rocked by a GDPR breach that threatened disaster. However, the worst fallout from this error seems to have been avoided, only to be replaced with a controversy that is far longer running, far more deeply rooted in Irish farmer’s psyche, and far more likely to cause a lingering breach in farmer’s relations with their co-op: fixed milk price contracts.

Tirlán’s fixed milk price contract scheme was initially sold as a means to protect farmers from unpredictable price fluctuations in milk. Farmers would be paid a baseline price on a certain amount of their milk, for a set period of time. To qualify for a 40c pr litre payment, for example, farmers had to commit to supplying some volume above 35% of their milk in 2023 and 2024, at a base price of 38c/l. When milk prices are low, this isn’t a problem for farmers, as they are protected from the losses these prices will necessarily lead to. However, in 2022, milk prices were not low.

The onset of the war in Ukraine, and the subsequent economic turmoil caused by the Russian invasion, hastened demand for milk worldwide. This naturally led to milk prices rising across the board, and consequently, farmers who had signed up for fixed milk price contracts were left out in the cold, trapped at a lower price. In August, for instance, milk prices per litre reached 49.5c.

According to the Irish Farmers Association (IFA), this trend, while unlikely to continue, may lead to a sustained increase in milk prices for the foreseeable future. Supporting farmers who have become trapped in these agreements has become a priority for other agrifood businesses. The “caveat-free” supports introduced by Lakelands dairies, and Dairygold, for example, have been hailed as the “gold standard” of industry supports.

Farmers had begun to report that their solicitors were regularly advising them not to sign fixed milk price contracts, as there was “nothing to protect them from a market price increase”. 

As such, relations between farmers and Tirlán have soured, as trust slowly erodes over the issue. To resolve the dispute, a fixed milk price contract support scheme was established by Tirlán, which aimed to advise farmers on an individual basis on the manner in which their milk prices and returns would be affected by the scheme, over the course of the next few years. However, the deadline for this support has caused further frustration.

Introduced in April, the scheme had an initial deadline of last November, though sustained criticism from farmers meant that the scheme had to be amended, and a new deadline to sign up was set for the 20th of December. In the run up to this deadline, some farmers complained that they had not yet received offer letters, which would clarify to them the benefits of the scheme for their own individual farm - in terms of milk volumes in the scheme in 2022, 2023, and 2024, the volume that would remain in the initial schemes, and the price they would receive for the fixed milk. Naturally, access to such information was seen as a prerequisite before any binding contract could be signed.

As this issue was unable to be resolved, Tirlán then faced the necessity of moving the deadline yet again, from the 20th to the 30th of December, a move which they claimed would allow them to commit to talking to every farmer affected by the scheme. Unfortunately for the co-op, this was still not enough for farmers, who now claimed that the revised deadline did not give sufficient time for them to seek independent financial advice, given the Christmas holidays.

Believing that the deadline would not be moved by Tirlán, the IFA stepped in to organise a meeting of its own in Kilkenny’s Newpark hotel, on the 6th of January. It was hoped that at this meeting, farmers would be able to discuss their issues with the scheme with the top brass of Tirlán, who were all invited to the gathering. None of the Tirlán board attended the meeting.

Instead, Tirlán launched a series of public meetings of their own, to be held in Dungarvan in Co. Waterford, on the 11th and 18th of January, with the final deadline now being extended for the last time until the 20th of January. These meetings, which were attended by Tirlán chair John Murphy, CEO Jim Bergin, and Chief Operating and Consumer Officer Jim O’Neill, took on a much more cordial atmosphere than some of the more inflamed meetings that Tirlán have previously had with farmers. By all accounts, it seemed as though farmers wished to reach a final agreement with the company, and move on.

At time of writing, these meetings remain the final twists in what has been a long and painful story for Tirlán. At a business level, instability is obviously bad for any company’s bottom line, but on a more intimate and personal level, farmers share an intensely important relationship with their co-op. The prospect of trust eroding away between both parties is one that Tirlán will fear far more than any immediate financial concerns. When a business is as ingrained in communities as Tirlán is in rural and agricultural Ireland, reputation and trustworthiness are worth far more in the long run than the tenure of any fixed milk price scheme. How the company refocuses itself, and gears towards a happier relationship with suppliers, remains to be seen.