The Ulster Farmers’ Union has expressed anger and bewilderment at the latest milk prices with some local processors dropping their base price by as much as 0.5p per litre.
Speaking after the announcement, newly elected UFU dairy chairman, Mervyn Gordon, voiced his concern.
He added: “One of the excuses offered by processors is spot price, which has reduced over the last number of weeks. Normally this would impact upon farm gate milk prices if local creameries were at capacity but as far as we are aware this isn’t the case at the moment."
The spot price is a small percentage in the calculation of overall milk price and Mr Gordon says with strong global dairy markets, it shouldn’t be bringing prices down.
“We cannot ignore the strength of global markets. Last week, GDT in New Zealand recorded its tenth consecutive increase. This is a record for price increases and has not happened before. Furthermore, butter, mozzarella and whole milk powder prices are stable at relatively higher levels,” he said.
The UFU says fresh SMP prices are starting to increase again and this is pulling up other varieties as well.
“There is speculation of a significant tender for fresh SMP, which is sending positive market signals. We are also optimistic about butter prices, with the gap between Oceania and EU prices at a record high exports are almost certain to increase as a result. This confirms that local farm gate milk prices are lagging behind what the market is capable of returning. It is about time processors stepped up to the mark and paid their producers the true price for milk,” said Mr Gordon.