The Ulster Farmers’ Union (UFU) says the return farmers are receiving for milk in Northern Ireland (NI) is down 40% compared to this time last year, and the majority are not earning enough to cover production costs while profits are being made further up the supply chain.
Read more from UFU dairy chair, Kenny Hawkes, in this news article on www.thatsfarming.com
For more than six months now, nearly 20p/l (pence per litre) has been taken from milk prices in NI and things are not getting any better.
This decline is only an issue in NI as other regions have started to show recovery.
Meanwhile, the largest proportion of our dairy farmers are not receiving enough to cover the cost of production let alone have any profit left over to support a home and family.
It is simply not sustainable, especially when input prices remain higher than average.
We have been inundated with calls from members who are extremely anxious and uptight about farmgate prices and where things are going to end up.
It is utterly disheartening to once again, have to call out the failing dynamics within our food supply system.
Our food producers are getting shafted while others in the dairy chain are clearly making money.
If this continues, dairy farmers will be put out of business which will have serious implications for the agri-food industry and our consumers.
In August 2023, the milk base price average was 28.47p/l. To break even, farmers needed to be receiving at least 35p/l – 36p/l.
Comparing local prices to what’s been happening in Europe, the NI farmgate milk price is the third lowest with only Latvia and Lithuania paying a lower price.
On average the EU farmgate price was 7.62p/l higher. Meanwhile, there is a difference of 4p/l between NI and Britain’s farmgate milk prices.
Alongside the dairy policy officer, I have met NI dairy stakeholders including all the major banks to discuss this situation.
A major concern right now is rising interest rates and the impact it is having on farm overdrafts.
Managing cash flow is key for any farm business and as we sit on the mouth of winter coupled with longer-term pressures, fears are excelling.
To keep their head above water, some local dairy farmers are cutting back from milking three times a day, to twice a day to try to reduce costs, but this is only a short-term solution.
We need our fair share of the bottle. It’s the only way to sustain our NI dairy industry.
In relation to the break-even figure, farmers needed to be receiving at least 35p/l – 36p/l, this is confirmed by independent dairy consultant Jason McMinn, and is extensively quoted by dairy farmers.