Northern Ireland milk producers face price fall

The Ulster Farmers Union has expressed deep concern for dairy farmers following a 3.74p/litre drop in milk price at United Dairy Farmers’ latest auction.

A sale on Thursday 26 April saw 56m litres of milk sold at an average price of 21.81p/litre. That was a sharp drop from last month’s sale, when 53m litres averaged 25.55p/litre, and 4.04p/litre down on the same time last year.

“We are very alarmed at the outcome of today’s auction and it will generate a lot of anxiety among producers,” said Andrew Addison, chairman of the UFU’s dairy policy committee.

“This is the biggest drop in local prices since October 2008, meaning that the auction has fallen 22.52% since the beginning of the year.”

The outcome at the latest New Zealand Fonterra milk auction on 17 April did indicate that there was going to be a further fall, as prices dropped by a record 9.9% compared to two weeks earlier.

Whole milk powder values fell by 11%, with skimmed milk powder down by 7.6% and cheddar by 12.1%. Overall, 32,122t of product were sold – 21% more than the previous sale – at a weighted average price of US $2,983/t (£1,845/t). That compared to 12,126t sold at $4293 (£2,653/t) at the same time last year.

The UDF result was very disappointing for farmers, as prices were now well below the cost of production, said David Dobbin, group chief executive at United Dairy Farmers. “However the fall does reflect the current very depressed powder and bulk butter markets.

“The reality is that the world is awash with dairy products at present. To make matters worse an early and bumper spring milk supply in the UK and Ireland has led to considerable quantities of distressed milk coming into to Northern Ireland from GB and Southern Ireland at prices around 20p/litre.

“While I would expect prices to improve as we move away from the peak production and a lower dependence on the very depressed powder market, the industry needs to take action to ensure the EU market clears the surplus product.

“We will be holding emergency talks with the UFU and local political representatives to seek their support to encourage the EC to be more proactive in managing the market, through the re-introduction of export refunds and improved intervention.”

See more