Gap in milk price is unsustainable – UFU

UFU dairy committee vice chair Cyril Orr said: "Earlier this month I participated in the COPA-COPGECA Milk Working Group.

“During the meeting it was noted that not only was the NI milk price lagging behind most European Union member states, but it is significantly behind those of our neighbours in Great Britain. This could be as much as five-pence per litre, which is not sustainable particularly as we approach the autumn and winter months when input costs will increase further.”

He added: "The seasonal rise in input prices is concerning and when you add the recent announcement by the Russian government that the Black Sea Grain initiative is terminated it is causing even graver concern amongst members. First signed in July 2022, the initiative has allowed Ukraine to export nearly 33 million tonnes of corn, wheat and other grains, and was a factor in the easing of local animal prices."

According to the UFU, NI spent a record £1.18 billion on animal feed last year. This figure was up 22% from the £966 million allocated in 2021.

Cyril Orr again: "We are more than aware of our exposure to dairy commodity prices but there is a basket of products which we make, and some are performing better than others - despite the decline in certain markets.

“We urge local dairy companies to take note of this gap and pay the most competitive price to their farmers. Otherwise, our dairy industry could be facing a very worrying final part of the year and beyond.”

Meanwhile, Farmers for Action (FFA) is indicating that large corporate organisations are now controlling the vast majority of the farm gate prices paid out in Northern Ireland.

According to FFA, current farm gate milk prices at around 32p/L would need an increase of 60% to reach approximately the true cost of production plus a margin to cover inflation. This would bring the producer priced up to 50p/L.

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Cereal growers would also need to secure prices rises of a similar margin to reflect their true costs of production.

FFA’s Sean McAuley commented: “Our farmers have delivered through COVID, hyper inflation, the Ukrainian war fallout and changing weather patterns due to climate change.

“The time has come for them to be properly paid at the farm gate!”

But it’s not all bad news.

Dale Farm’s CEO, Nick Whelan, has indicated that farm gate milk prices may start to strengthen again during the fourth quarter of this year.

He commented: “Milk production levels are starting to fall across many of the world’s most important dairying regions.

“Markets respond to supply: demand factors. But there are indications that milk prices could remain at reasonable levels, once we get into 2024.”

“Labour availability has become a critical factor in the milk production equation right around the world.

“Meanwhile, the demand for milk and dairy products continues to grow.”