Union concerned at growing price gap for milk producers

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UFU dairy committee chairman, William Irvine, believes farmers are rightly concerned about the growing gap in base milk prices.

“The fodder issue is on everyone’s mind. We are facing a potentially costly winter with more bought in feed and need a strong cash flow now to prepare for that. The price disparity between local processors simply cannot be justified,” warned Mr Irvine.

The committee chairman and County Armagh dairy farmer says farmers receiving a milk price 2.5p/litre less than what others are being paid are automatically at a disadvantage.

He added: “Put simply, many farmers feel short-changed. What they see is one processor paying what the market is capable of delivering, while at the other end of the scale, others are seemingly dragging their heels. The reason for this disparity needs to be explained by these businesses, whose suppliers are becoming more and more disillusioned.”

The UFU says it is urging all dairy processors in Northern Ireland to pay what the market is returning.

“Only then will local dairy farmers have a chance of tackling what could be a challenging autumn and winter,” concluded Mr Irvine.

Meanwhile, AHDB Dairy is reporting a general slowdown in trade on wholesale markets that has minimised increases in the market value for milk in July. Despite cheese markets remaining firm through the month, butter and skimmed milk powder (SMP) prices fell on the back of limited demand.

The slowdown in the market in July, in itself, is unlikely to generate upward movements in farmgate prices going into the autumn. Other factors, such as any impacts of higher on-farm production costs on milk supplies, will also influence how milk prices move through the next few months.

According to AHDB, July has been a quiet month for wholesale dairy trading, as the holiday season kicked off. Buyers were seemingly not drawn back into the market despite production falling towards the seasonal trough and concerns over the increasing dry, hot weather.

Cheddar seems to be one of the only markets with a bit of positivity surrounding it at present. Stocks do not appear to be ample and, despite being relatively quiet on the trading front like the other markets, prices held firm in July.