Processors have been urged by a major farming organisation to “step up and play their part” for dairy farmers in Northern Ireland because of ongoing cost pressures.
The Ulster Farmers’ Union (UFU) believes there is “capacity for milk price to significantly increase” and have urged dairy processors to “follow the lead set by Lakeland Dairies and deliver a strong increase to their base milk price in line with market returns”.
Last week Lakeland Dairies confirmed that it would increase the base price for milk supplied in July in Northern Ireland to 37.3p/L – inclusive of the 0.5p/L Sustainability Incentive Payment.
The base price increased by 1.5p/L from last month.
Dairy farmers
The UFU said that dairy farmers have “put down a horrendous 12 months which has left a massive toll on cashflow”.
“The coming months offer dairy farmers a chance to improve their balance sheet, but they can only do this if their processors step up with a strong milk price and the market signals are there to deliver it,” the farming organisation said.
The UFU has pointed to the results of the latest Global Dairy Trade (GDT) auction as a strong indicator of current trends.
The GDT price index rose by 0.5% following the auction results published earlier this month (Tuesday, August 6).
According to the UFU this modest rise suggests that dairy markets are “looking positive”.
“This does not sound like much of an increase, however historically, July and August have usually been slow months for GDT auctions.
“The fact that there is a small, positive increase should provide a stimulus with New Zealand coming into its new milk season,” the UFU highlighted.
There were a total of 186 bidders in the latest GDT auction which saw 35,965MTof product sold.
The average selling price was $3,680 per metric ton (MT) in the auction, which lasted for more than two and half hours, during which there were 133 winning bidders and 18 bidding rounds.
The GDT price index is calculated from the total quantity sold in a trading event across all products, contract periods and sellers.
