Breakdown of EU aid package in UK

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DEFRA will distribute England’s share of the UK’s £26.2 million EU support package to dairy farmers based solely on 2014/15 milk production volumes. £15.5 million has been allocated to England, which suggests the payment could be in the region of 0.17 pence per litre.

Northern Ireland will receive a boosted allocation of £5.1 million.

DEFRA has stated this is in recognition that Northern Irish farmers have been receiving some of the lowest milk prices in Europe. Scotland will receive £2.3 million and Wales £3.2 million.

In Scotland, Wales and Northern Ireland, ministers will have flexibility on how they wish to use their allocations to support farmers. In England, the one-off payment will be made to farmers in December from the Rural Payments Agency.

Meanwhile, New Zealand processor Fonterra has increased its 2015/16 forecast farmgate milk price by around a fifth, taking it to around 14ppl (NZ$4.60 per kilo of milk solids).

The price uplift follows recent increases at the Global Dairy Trade Auction

Fonterra has also lowered its 2015/16 milk production forecast further, from 2-3% below last season to more than 5% down on 2014/15.

The fall is due to lower cow numbers, reduced supplementary feeding and challenging weather conditions across much of New Zealand.

However, despite signs global supplies could be easing, Fonterra warned that an increase in demand would be needed in order for prices to continue to rise.

In addition, the co-op is discontinuing its farmer milk price risk management tool, the Guaranteed Milk Price Scheme.

The scheme will finish at the end of the 2015/16 season, as Fonterra reports it did not have widespread support from farmers.