Calls for more ‘value added’ approach

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Recent weeks have seen a number of commentators calling for Northern Ireland’s milk processing sector to take a much more ‘value added’ approach when it comes to getting the best return for the dairy products we manufacture in this part of the world.

But whether we go down this road or remain committed to products such as milk powders, cheese and butter, the real value of milk will still be centred on the components therein – butterfat, protein and lactose.

A staggering 87% of the milk produced in Northern Ireland goes for manufacturing. No other region of Europe is so reliant on this form of processing.

Local milk output has increased by 50% over the last two decades. We entered the scheme with an annual allocation from Brussels of 1.2 billion litres. However thanks to the opening up of the UK quota trading market a decade ago Northern Ireland’s 4,000 plus dairy farmers have now amassed a total quota eligibility of 1.9 billon litres.

And credit must go to the province’s processing sector for having the wherewithal to cope with this additional throughout while still maintaining an acceptable price structure for their farmer suppliers.

Despite the current pressure on farmgate returns, there remains every prospect that milk output will continue to expand in Northern Ireland. We have the management expertise to manage large dairy herds effectively.

Yes there is the hard work factor. Milking cows 24: 7 is no joke, never mind getting on with all the other management tasks that represent the continuous challenge of modern dairy farming practice. But I come back to the original point: 87% of our milk output ends up in manufactured dairy products such as powders and butter.

In this context, the water content of milk is worthless. In fact it has a very significant nuisance value, given the drying costs incurred by dairies in getting at the all-important solids fraction.

So given all this, why do we continue to pay farmers on a per litre basis, when the real value of milk lies in its butterfat and protein content? Dairy farmers in New Zealand and some parts of the United States are paid purely on the weight of fat and protein they deliver: why can’t we do the same thing here?

After all processors, breeding companies and advisors are telling farmers that they must improve fat and protein percentages. Given this state of affairs, is it not logical for the industry to take the next step and commit to a farmer payment system that reflects the true value of the milk we produce?