12 July 2002

Big rise in NI milk price holds hope for rest of UK

By FWreporters

MILK prices in Northern Ireland jumped significantly this week, after the monthly auction by United Dairy Farmers, offering hope to producers throughout the UK.

In total the producer group sold around 23.5m litres on one- and three-month contracts, fetching 18.16p/litre and 17.97p/litre, respectively. This compares with about 15p/litre in June and 13.5p/litre in May.

Ulster Farmers Union chief executive, Clarke Black, said three things were behind the increase – the much improved currency situation, export refunds and the downturn in supply.

"Export refunds for skimmed milk powder and whole milk powder have gone up significantly over the past six months, but each time they were met with further cuts in world prices by the southern hemisphere producers," he said. "These producers are now out of the market and at last the refunds are starting to kick in."

But while the better auction price will give more confidence to milk producers, it could be several months before an upturn in the 14.5p/litre farm-gate price, said a UDF spokeswoman.

Milk production in the UK continues unabated, with Junes volume topping the Charles Holt/farmers weekly profile for the eighth consecutive month.

Butterfat adjusted production was 1.22bn litres – 5m litres over the profile for the month, says Charles Holt of the Farm Consultancy Group. "The rain is helping as it is keeping the grass growing," he says.

The UK is now 67m cumulative litres over profile, and Mr Holt reckons production will continue to be strong for July and August. But yields could drop substantially later in the year, he adds. "What is really going to hit us in the autumn is silage quality, which is awful."

Interest in milk quota continues to weaken, with prices dropping over 0.5p/litre for leasing and 2p/litre for sales in the past month. A 4% butterfat quota is now worth about 17.5p/litre, with leasing at just 2.5p/litre. &#42