Dairy processors must pass on price gains, says UFU

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Ulster Farmers’ Union, dairy chairman, William Irvine says dairy processors must take steps now to maximise returns to dairy farmers.

He said that despite better markets, thanks to the weakening of sterling, most dairy farmers were still living with a milk price well below the true cost of production.

“The unacceptable delays we are seeing in processors passing the benefits of these price gains to farmers is a source of concern and growing frustration. Indeed many farmers now feel they are being duped by processors, who have no excuse not to pay better prices.”

William Irvine, UFU dairy chairman

Mr Irvine said: “Farmers in Northern Ireland are well aware that prices for cheese, butter and milk powder have moved upwards over recent weeks.

“The unacceptable delays we are seeing in processors passing the benefits of these price gains to farmers is a source of concern and growing frustration. Indeed many farmers now feel they are being duped by processors, who have no excuse not to pay better prices.”

He added that deliberately delaying price improvements was “deeply unfair” to farmers who have suffered over two years of poor returns.

He said: “They know from us and their own suppliers that this has had a devastating impact on many farm businesses.”

Dairy commodity price increases began in late May. Since then the New Zealand Fonterra (GDT) price has risen by 20 per cent and the Dutch Dairy Board (Zuivel) butter price is up a massive 60 per cent from its trough.

“Despite these gains the DAERA average for August was just 19.77 pence per litre. There is no question that this is lagging well behind what the market is returning,” said the UFU dairy chairman.

He added that this price will not cover the debt on farms or costs as we move into the winter months.

“There are more price increases to come but processors need to act more rapidly if they want to guarantee a future supply of milk,” he said.