Belfast Telegraph

UK Website Of The Year

The Northern Ireland dairy dispute is escalating... but what is it all about?

By Claire McNeilly

Published 01/08/2015

Dairy farmers use their tractors to block approaches to a supermarket in Coleraine
Dairy farmers use their tractors to block approaches to a supermarket in Coleraine

Ulster dairy farmers have warned that poor milk prices are posing a threat to their futures.

And if the slump continues, many have expressed real fears that they may go out of business.

There are more than 2,500 dairy farms in Northern Ireland - less than half the number that there were in the 1990s.

Currently, farmers get paid around 19p for a litre of milk, which is well below the cost of production and there is no sign of an improvement.

On average farmers need around 27p a litre to break even.

Dairy farmers are under price pressure because of a range of issues, including decreased demand from a stuttering Chinese economy and a Russian ban on EU food imports in retaliation for EU sanctions following the Ukraine conflict.

In addition, the ending of EU milk quotas in April and a general increase in global production pushed up supply. The EU farm commissioner Phil Hogan has resisted calls for an increase in the price at which Europe will buy milk into intervention as a support mechanism.

It currently stands at between 16 and 17p.

Mike Johnston of Diary UK, however, said an increase in the intervention price to 23p a litre would be more realistic.

"Global markets have been falling since the early part of last year and that has been reflected in the prices that have been paid to dairy farmers here," he said.

"The downturn is not likely to be corrected quickly.

"The problem we have is that the current intervention price was set in 2003 so it is way below the cost of production.

"Since September last year we have been lobbying for the Commission to increase the intervention price to better reflect production costs and better reflect where markets are now.

"That would have a greater effect on improving the price to dairy farmers than blockading supermarkets."

He added: "This mechanism was used in a previous downturn with skimmed milk powder in 2009 and it worked; within a relatively short period of time markets bottomed out."

Milk prices move in cycles. In 2013 the prices were good at around 31p a litre, but since mid-2014 there has been a consistent downward slide.

Belfast Telegraph

Read More

From Belfast Telegraph