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No single cause for Northern Ireland milk crisis

By Donald C McFetridge

Published 05/08/2015

Dairy farmers protest over milk prices at Sainsbury’s in Coleraine yesterday
Dairy farmers protest over milk prices at Sainsbury’s in Coleraine yesterday

Over the past week or so it has become patently clear that farmers in Northern Ireland are facing an extremely difficult time.

Dairy farmers have been at the forefront of a high-profile campaign to bring the extent of their plight to the attention of the general public through a series of largely peaceful protests outside supermarkets.

Personally, I believe that such protests have little impact on the supermarkets and only serve to upset customers keen to get on with their shopping.

Everyone is keen to find a scapegoat to blame for the situation, but some commentators forget to set this situation in a more global context.

Internationally there is a surplus in production and rising production costs, resulting in tougher market conditions which have forced down the price of milk to the extent that local farmers are not being paid enough to cover their costs.

Exchange rates, the slowdown in the Chinese and Russian markets and international relations all have an impact upon the global environment and, unfortunately, it is in this context that Northern Ireland's farmers have to operate.

Some have defended the supermarkets, saying that it's not their fault that the price of milk on the shelves has decreased, but the fact remains that most of the leading supermarkets are in fact using milk prices as loss leaders.

Arguably it should be noted that the supermarket sector is also under threat these days and is operating in a retail environment where they are constantly cutting each other's throats.

A few years ago local farmers were in despair when we had a situation where the multiples were bringing in milk from Scotland because it was cheaper than locally-sourced product.

At that time the majority of consumers did not appear to express any real concern about the provenance of the product as long as it was cheap and, unfortunately, that still appears to be the case today.

From my conversations with local dairy farmers it strikes me that John Wayne's advice about "getting off your horse (tractors) and drinking your milk" would hold very little appeal in today's worrying agricultural environment.

  • Donald C McFetridge is a retail analyst at the Ulster University Business School

Belfast Telegraph

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