UFU lays down marker on prices

The UFU is pointing out that after the UK went into lockdown to slow the spread of coronavirus (COVID-19), many dairy prices collapsed as processors immediately reduced the milk price. However, since early May commodity prices have been increasing each week.

Butter is now €530/tonne (21 percent), skimmed milk power is up €450/tonne (20 percent) and mozzarella is rising €290/tonne (15 percent). Spot milk prices have also improved with trading in and around 30p per litre. This is supported by favourable, average future prices which are back to pre-lockdown levels.

Mervyn Gordon said: “Our dairy farmers have been enduring the financial pressure of farmgate milk cuts since the beginning of the COVID-19 pandemic. At the height of the outbreak, we were told that the surge in retail sales did not compensate for the overnight slump in the food service with fast food businesses and restaurants shutting down.”

“However, cheddar remained stable during this time and now there has been a clear improvement in commodity dairy prices. They have been continuing to rise week on week and to strengthen matters, food service businesses are slowly beginning to open again.
“With processors preparing to set the May milk price, the notable recovery in key dairy commodity markets in recent weeks, needs to be reflected in the farmgate price so that our farmers receive a fair return. The weather is another factor that needs to be considered. Spring 2020 has been one of the driest since records began and milk production has been flatter than expected, with sources in Great Britain anticipating a shortage later in the year.”
Mr Gordon concluded by highlighting the hard-work and dedication of dairy farmers across the country since the COVID-19 outbreak began, and that the road to recovery for the dairy sector needs to start now.

Meanwhile, many of Northern Ireland’s political parties and agri-stakeholder groups are giving their perspective on how the £25m Covid-19 aid package, secured by farm minister Edwin Poots, should be distributed.

Sinn Féin spokesperson on Agriculture and Rural Affairs, Declan McAleer MLA, has said that farm entitlements should be the main criteria for allocating intervention funding for sheep and beef farmers from the £25 million COVID scheme.

Mr McAleer said: ”Every farmer has been impacted by this pandemic and various reports point to an overall farmgate decrease in cattle of around £240/head during the pandemic and a decrease in sheep in the region of £31/head.  

“Input costs have risen substantially during the pandemic with farmers reporting that fertilizer went up by £15 per tonne and feed by £25-£30 per tonne.  We are all in this together, every farmer is impacted.    

“Hotels, restaurants and the food service sector was the market for 35%-40% of beef and lamb and their lockdown has precipitated a sudden collapse in prices that has been felt along the supply chain from the finishers to the hill producers. 

“I made a strong case to the Minister that due to very low incomes and the loss of the ANC payment that sheep and beef farmers are particularly impacted by the COVID crisis and more vulnerable to its impact.  Their average incomes, according to NISRA are less than half the regional average and this makes the other COVID measures such as the Self Employed Income Support Scheme of little benefit to them.” 

The impact of Covid-19 on the beef and sheep sectors is an issue that has also been raised by the Livestock and Meat Commission (LMC) courtesy of that organisation’s liaison with Department of Agriculture, Environment and Rural Affairs (DAERA) officials.

LMC chief executive Ian Stevenson said: “Our discussions centred on the results of a study carried out by the Anderson Centre. The work was commissioned by LMC with the support of the Ulster Farmers’ Union and the Northern Ireland Meat Exporters Association.

“Our engagement with DAERA officials on this matter commenced prior to the recent aid package announced by the Agriculture Minister, Edwin Poots.”