Local Milk Farmers Fear Dropping Prices Says UFU

Urgent action needed to support falling milk prices, says UFU.

Milk producers across CountyDown and beyond are suffering as the price of milk is progressively collapsing.

The milk supply chain is under pressure. On some occasions in the UK milk tankers have not arrived at farms to collect milk due to Covid-19 and farmers are faced with a dilemma. Cows are not like factories that can be shutdown… they produce milk that cannot be turned off.

Milk farmers are facing marketing issues as prices drop and Covid-19 continues to cause havoc to milk collections.

The Ulster Farmers’ Union (UFU) dairy committee have called on Government to take immediate action to counter a pending drop in the Northern Ireland farmgate milk price. Meanwhile dairy commodity prices are already enduring a free fall.

The most recent figures from the EU Milk Market Observatory, have shown a major downward turn in dairy commodity prices. However, these figures are already out of date and the UFU witnessed an alarming drop in Dutch butter prices this week with butter down €500/tonne, meaning commodity prices are back 23 percent since the beginning of March. With skimmed milk powder back 26 percent and Mozzarella falling by 16 percent, farmgate milk prices will inevitably come under significant pressure over the coming days, weeks and potentially months.

Last night, the UFU dairy committee held an emergency teleconference. They drew up a toolbox of measures that will be presented to Government to help protect the dairy sector from potentially devastating farmgate price cuts.

Commenting on the matter, UFU dairy chairman Mervyn Gordon said: “There is not going to be one single solution or ask that will safeguard our dairy industry from the fall in farmgate milk price.

“This is why we’re asking for a toolbox of options that will cover the short and long term, ensuring that the local dairy sector has a chance of coming out the other side of this pandemic in a sustainable position.”

Mr Gordon said the first option is for Government to provide a top-up to supplement any drop in the farmgate milk price. “We have a specific mechanism in mind which we have devised, and this will aim to protect dairy incomes in the immediate term. We have told Government that there will be a need for an immediate injection of cash on farms,” he said.

Another option generated by the UFU dairy committee, would be some form of Government buying scheme. The Italian Government have temporarily taken product off markets that are struggling. For example, the food service and these products are then being redistributed to those in need.

A longer-term tool would be a UK specific intervention scheme. This would be for distressed milk and be designed to take it off the market for a limited time. It would be a UK funded scheme with product put into store in GB and NI, and is likely to be for longer life products such as powders and cheese.  With a scheme of this kind being implemented at UK level involving very limited products, this will decrease the likelihood of any overhang which could maintain low prices.

Mr Gordon concluded: “Northern Ireland dairy farmers were struggling even before this pandemic hit. The prospect of any drop in price, let alone any prolonged period of low prices will have a devasting impact on our sector if Government does not act urgently.”