Pressure builds in dairy sector

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The Ulster Farmers’ Union (UFU) Dairy Committee chairman Jonathan Moore has told Farming Life that the disparity between producer returns and the actual on-farm costs associated with producing milk has now reached nine pence per litre.

He confirmed that significant numbers of local milk producers had seen the base price paid to them for December milk fall to 20ppl.

“Current Department of Agriculture costings point to a breakeven production price in the region of 28 to 29ppl. So the impact of the current market downturn on individual farm businesses is evident,” he added.

“For its part, the union is doing everything possible to help alleviate these problems. For example, we have met the banks, who have committed to support individual farm businesses in the most flexible way possible. A union deputation has met with government representatives in London in order to identify the range of possible measures that can be drawn down to support the milk sector at this time.”

But the UFU representative also recognises the crucial role that enhanced intervention measures can play in alleviating the problems now confronting the dairy sector.

“This policy option is also being followed up by the union as a matter of priority,” he added.

“It’s doubtful that an improved intervention scheme would ever cover the full costs of production incurred by dairy farmers in Northern Ireland. But even to get a lift from the current baseline of 17ppl equivalent up to possibly 23 pence would be a great help.

“The latest soundings from Brussels would indicate that changes to the current intervention regime will not be agreed until the current milk quota arrangements come to an end. The reality is that local milk producers cannot wait until April or May of this year: they need all the support they can get now.”

Mr Moore is also calling for all of Northern Ireland political representatives to join forces now in order to get the best possible support deal for milk producers.

“It is particularly important for Farm Minister Michelle O’Neill to liaise closely with her counterparts in Westminster,” he stressed.

Meanwhile, the European Parliament’s Committee on Agriculture and Rural Development will host a hearing entitled: ‘The milk package and the prospects for the dairy sector’.

Ulster Unionist MEP Jim Nicholson is drafting a report into the dairy market on behalf of the Committee and will also be participating in the event. Looking ahead to the hearing Mr Nicholson said it would provide the dairy industry with a platform to spell out in clear and precise terms the problems currently facing producers and processors to Commission officials and MEPs.

He added: “The European Commission is continuing to hold back on offering real assistance to the dairy industry, preferring to wait for demand from China to increase – this is a big gamble.

“I strongly believe that given the level of pain currently being felt by farmers there is a very real need for interim measures to help stabilise the market, namely reviewing the intervention rate, which I will continue to press for.

“Looking to the future we must also be better prepared to manage volatility and next week’s hearing will examine if the support measures in place in the EU will be fit for purpose in the post quota era.

“The event will bring together experts who will I hope challenge the status quo and propose solutions which will both help the EU dairy industry respond to future challenges more effectively plus also ensure it is better placed to make the most of the opportunities it will face in the years to come.”