Calls for a debate on mandatory milk contracts

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The Ulster Farmers’ Union says Northern Ireland’s dairy industry needs a thorough debate on mandatory milk contracts. The call comes after a number of milk processors cut June base prices.

Speaking after the latest round of milk price announcements, UFU deputy president, Victor Chestnutt, pictured, says dairy farmers are understandably angry.

He added: “One processor has dropped the base price by 0.50p per litre, putting the base price below 25p per litre. We can see no justification for this drop, if anything, the market is signalling prices should be rising.”

The UFU claims that with dairy commodity markets strong since the beginning of the year, it is increasingly frustrated that processors continue to refuse to share the positive returns with primary producers.

“It is this kind of unscrupulous action by dairy processors that highlights why the industry needs an honest and frank debate round mandatory milk contracts.

“If mandatory contracts were in place, this unjustified cut to the base price could not have happened,” said Mr Chestnutt.

DEFRA recently confirmed it will shortly launch a UK wide consultation on mandatory milk contracts and Mr Chestnutt says the recent unwarranted base price reductions demonstrate now is the time to have this debate.

“Primary producers in Northern Ireland are crying out for transparency when it comes to milk pricing.

“Now is the time for a healthy debate. It is clear we need more transparency in the supply chain and to bring a stop to unexplained and unfounded drops in farm gate price,” he said.

The UFU and its UK farming union counterparts have already begun discussing what mandatory milk contacts could mean for the dairy industry. The UFU is also urging processors to engage fully in the mandatory contracts debate.

The UFU first raised the issue of milk contracts at a dairy volatility conference, which it co-hosted with the Dairy Council for Northern Ireland back in 2016.

Farming Life contacted a number of dairy processors in the wake of this week’s UFU announcement. All say that now is not the time for a debate on milk contracts. Rather the entire milk sector should unite around the challenges posed by Brexit.

Many of the dairies now believe that the possibility of a ‘No Deal’ Brexit has been heightened, given ongoing political developments at Westminster. The fear is that the wrong Brexit deal could have a very negative impact on dairy markets.