Talking milk prices
A deadline of 1 August looms for an escalation of protests over milk prices in Britain, dairy farmers in Northern Ireland may be watching with interest but there is no sign of protest action in NI.
Protests could have an effect in Britain as milk prices there depend much more on the retail market and what the big supermarkets are prepared to pay, while prices in NI relate much more to the world dairy commodity markets.
The local milk processor with most to gain from higher prices in Britain is Dale Farm, which has a bigger proportion of its milk going into consumer products rather than commodities.
Current milk contract arrangements in Britain mean that producers are divided.
There is around 1.8 billion litres (16% of production) bought on contracts that are guaranteed to pay 'cost of production' and on which prices are adjusted as costs change on a quarterly or half-yearly basis.
These are 'direct supply' contracts with Tesco, Sainsbury, Waitrose and Marks and Spencer, and most are currently paying over 30pence per litre.
Other milk producers on non-aligned contracts or supplying to other supermarkets are not so well off. It is estimated that they are receiving between 24p and 27p/litre and are tied to contracts that require 12 months' notice but in which prices can be altered at relatively short notice.
The National Farmers' Union of Scotland argues that it is this discretionary approach to milk pricing that has given milk processors the power to announce cumulative price cuts that could, by 1 August, wipe up to 4p/litre off the price received by many dairy farmers in Britain.
The Scottish NFU wants those cuts reversed and has written to DEFRA Minister Jim Paice urging him to introduce legislation to tackle the problem.
In front of over 2,500 farmers at last Wednesday's protest meeting in London, Farmers For Action (FFA) chairman David Handley repeated his promise of action when the Olympics start, if the recent cuts in milk prices were not reversed.
FFA in Northern Ireland says that it is vital for NI dairy farmers to register support for British dairy farmers efforts to achieve improvement in the current UK disastrous farm gate milk prices.
"If NI dairy farmers do not, then they are effectively saying we are happy with the current NI farmgate milk prices we are receiving," says local FFA co-ordinator, William Taylor.
That price in most cases is less than prices being received by dairy farmers in Britain.
Taylor stated that current milk prices across the UK could only have one result, a mass exodus of dairy farmers from the industry.
He maintains that an increase of 80% is needed to reach the European Milk Board's cost of production figure of 40p/litre (inflation linked).
NI dairy farmers can call Sean McAuley on 07754475564 or William Taylor 07909744624 or email support to either taylor.w@btconnect.com or secretary@farmersforaction.org
Minister Jim Paice is to meet his counterparts from Scotland and Wales to discuss the milk pricing crisis ahead of the Royal Welsh Show (23 to 26 July).
On enquiry to the DARD press office, the Irish Farmers Journal was advised that the Minister Michelle O'Neill's diary has no meeting scheduled with Minister Paice but this could change.
Base prices set for June milk in Northern Ireland are unchanged from May for suppliers to Fane Valley (28p/l) and Town of Monaghan Co-op (23.5p/l).
Lakeland Dairies has set a base price of 23p/l (down by 0.25p) and Donegal Creameries (Connacht Gold) is understood to be at 23.25p/l (down 0.25p). Full details in NI milk price league next week.
Whole milk powder prices were down by 5.8% at the Global Dairy Trade (GDT) internet auction this week and the weighted index for all dairy commodities sold was down by 0.9%.
The anticipated New Zealand supplies onto world markets next autumn and winter are keeping the pressure on prices.
WMP exports from Oceania are expected to be 7.3% higher and GDT announced that there would be 502,000 tonnes, an increase of 10,000 tonne of WMP, sold on their platform over the next 12 months. See page 11.
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Source: farmersjournal.ie