The Ulster Farmers’ Union says it’s bitterly disappointed at the latest plunge in global milk prices.
The benchmark Global Dairy Trade (GDT) auction in New Zealand fell by 5.9 per cent this week, continuing a steady slide in prices. The UFU says that with milk prices falling and the Russian market set to remain closed, European farmers are potentially facing the prospect of a long period of low milk prices, adding to the financial pressure on many dairy businesses. It has warned that there is now a real possibility that some people will be forced out of business this year.
For the past 12 months, the UFU have lobbied at a local, UK and EU level for a range of measures to deal with the falling price and help secure the viability of the dairy industry. One of these was the need for a review of EU dairy intervention trigger prices. These have remained unchanged for over seven years, despite on-farm production costs rising by almost 50 per cent over the same period.
“We have seen milk prices fall substantially, to the extent that they have been below the cost of production for some considerable time,” said UFU President Ian Marshall. “With an average base price of 20 pence per litre, and with Rabobank analysis indicating that any recovery is unlikely before early 2016, the UFU is redoubling its efforts for the European Commission to accept the need for a review of intervention threshold levels. However, intervention on its own is not the solution to our problems. It’s merely one tool to assist in dealing with extreme volatility and must be part of a wider discussion on managing extremes in the future. Without urgent action the viability of many dairy farms will be in doubt,” he said.
The UFU has produced a report outlining why a review of dairy intervention is urgently needed. The report has been distributed widely to local, UK and European politicians and Government officials to ask that they give their support in urging the EU Commission to carry this out as a matter of urgency. The report underlines that intervention thresholds have not been reviewed since 2008. Since then fixed and variable on-farm production costs have increased considerably. Average production costs in Northern Ireland are around 26.5 pence a litre, but for those heavily borrowed or with housed herds because of access to land this is closer to 30 pence. This is against an intervention trigger price equivalent to around 16 pence. UFU dairy chairman, Jonathan Moore, says he will use his position on a Brussels committee to press this case with officials and other farm lobby organisations.