Dairy farmers struggling to cover expenses due to rising production costs could be putting Northern Ireland’s milk supply at serious risk, the Ulster Farmers’ Union (UFU) has said.
UFU dairy chairman Mervyn Gordon, stressed the extra expenditure must be alleviated as quickly as possible by both retailers and processors so farmers can “receive a fair return from the booming dairy market”.
The price of liquid milk in shops up to 2022, is 7% lower than it was 10 years ago, according to dairy company Arla Foods.
Mr Gordon warned that if the price of milk and dairy products in shops do not rise correspondingly, Northern Ireland could be set to endure a “milk scarcity” as farmers will not be able to keep up with the costs of producing high-quality milk.
“If they can’t cover the basics, how can they be expected to continue running a farm business that is supposed to support a family and home?” he asked.
According to analysis gathered by the UFU, in February 2022 the average pint of milk cost 49p (86p per litre).
By March 28, the average pint of milk cost 60p (£1.05 per litre) – an increase of 22%.
Last month the average base milk at the farmgate rose by just 1.75p.
Meanwhile, fertiliser prices in NI are at the top end of the global scale with over 300% inflation, fuel has more than doubled with red diesel costing £1.05/litre, and animal feed prices continue to hit record levels.
“When dairy products are doing well in the market with prices rising, you would normally see an increase in the amount of milk being produced off the back of it as farmers want to take advantage of improved returns,” said Mr Gordon. “However, the eye-watering productions costs are having the opposite effect.
“On average, 60% of direct costs on a dairy farm are attributed to feed, fuel and fertiliser.
“What’s even more worrying, is that the full impact of cost increases is still to be felt by the dairy sector.
“Farmers are struggling to keep their head above water as it is and if things continue like this, their cash flow will be well into the negative in a matter of months.
“We need retailers and processors to get behind our dairy farmers and help protect local milk production here in NI, so they can continue producing to meet consumer demand.
“It’s long been the UFU’s position that the dairy farmer’s struggle is largely due to the way milk is priced.
“Farmers’ extra production costs needs to be alleviated by those further up the supply chain.
“Otherwise, there is every likelihood that dairy farmers will reduce output in response to unsustainable input costs.”