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Dramatic 12p per litre milk price fall threatens farmers

By Chris McCullough

Published 19/04/2016

Dairy farmers protest at Stormont in July
Dairy farmers protest at Stormont in July

Milk prices in Northern Ireland could be about to drop to 12 pence per litre forcing a warning that if farmers do not cut their supply they could go out of business.

With milk prices in a spiralling descent dairy farmers in Northern Ireland have been urged to cut their supply in order to regulate the market and let it recover.

Since milk quotas were abolished in the European Union in 2015 some farmers have increased their supply in order to compensate for falling prices.

However, there is too much milk on the market and supply is overwhelmingly smothering the demand, making prices crash even further.

Fair Price Farming NI has just issued a warning to local dairy farmers that if supply does not fall soon, more farmers will go out of business.

Milk prices are currently around the 16-18 pence per litre depending on who farmers are supplying their milk to.

Fair Price Farming says that price is about to fall to 12 pence per litre and if it does, will signal the end for many of the region's farm businesses.

Charlie Weir is the chairman of Fair Price Farming NI and also milks a large dairy herd in Waringstown.

He said voluntary reduction is the only way to save the industry and that farmers wouldn't need to cut supply by much to make a difference.

Mr Weir said: "We were told last week in Brussels that one local processor is going to cut its price to 12 pence per litre for June milk.

"That is certainly not sustainable to any farm business and will spell the end for some farmers.

"We see the only way to curb this devastating price fall is to cut production. I can understand farmers who increased their production to keep their cash-flow going when prices collapsed.

"However, we are now at a stage where the glut of milk is driving prices down even further and it cannot last.

"It wouldn't take a huge amount of reduction to start making a difference but we need the cuts now.

"Those farmers that are already struggling will not be able to cope for much longer if prices sink to 12 pence.

"The powers that be in Europe will not agree to mandatory reduction so it's time farmers here took control of their own destiny and reduced the supply so that the market has time to even out somewhat.

"There was a vote in Europe for voluntary reduction which was supported by 23 Member States. Only one voted against it and there were four abstentions.

"If voluntary reduction does not happen soon, it's curtains for some of us," said Mr Weir.

The Ulster Farmers Union does not agree a reduction of supply in Northern Ireland is a good idea, when other countries in Europe won't back it.

UFU president Ian Marshall said: "The UFU, along with others, recognises that supply is a problem in the dairy industry.

"However, we do not believe a supply reduction programme would be effective on a voluntary basis while others in the EU, including the Republic of Ireland, have no plans for a similar programme and indeed are continuing to increase production.

"We recognise that such a programme is in place at an EU level, but the lack of funding for a compensation scheme, and its potential limited impact, make it unattractive. We believe the uptake across the EU will be limited.

"Given the European Commission's refusal to allow a return of any form of quota system we do not believe it would allow a mandatory scheme.

"There is a widespread belief across farm lobby organisations that a voluntary initiative would be futile unless all producers and processors take it up.

"There are no guarantees prices would rise because of a supply reduction. Indeed there is a risk it would see others rush to fill the vacuum.

"EU Farm Commissioner Phil Hogan has put in place a mechanism for the industry to reduce production but this only shifts responsibility from Brussels back to the industry without any guarantee of Member State financial support or an improvement in price."

Belfast Telegraph

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