Milk auction boost for dairy farmers

By James Campbell

Northern Ireland dairy farmers should receive further milk price improvements following this week's auction of milk by United Dairy Farmers.

The prices were the highest since January 1997. "Spot" milk for delivery next month averaged 24 pence/litre for 5 million litres sold (price range 23.8 to 24.2 p/l).

Fifteen million litres sold on the three month contract averaged 23.67 p/l (ranging from 22.9 to 24.1 p/l).

The longer term milk sold on the 12 month contract commencing in October averaged 22.23 pence/litre (ranging from 20.1 to 22.7 p/l for the 60 million litres sold).

These are the highest autumn milk prices since the equivalent auction in 1996 (See Agri-business page12).

High compositional quality of October milk means that it is worth more to processors, but these improved prices also reflect world market price rises.

Skimmed milk powder prices are at their highest level since the beginning of 1997. Since April this year the world market prices quoted for skim powder have risen from US$1600 to $2150; whole milk powder from $1700 to $2050; cheese from $1825 to $1950. These are US Department of Agriculture figures.

In the UK butter prices have increased by 10 per cent since April and cream by more than 20 per cent.

Dairy processors contacted by the Journal say that there is little or no profit for them with milk at these prices.

United Dairy Farmers' own milk processing subsidiary Dromona Quality Foods is expected to announce next week a substantial loss on its business for the year to March 2000. Other dairies are also being squeezed.

The auction system has maintained Northern Ireland milk prices at levels well above those paid by the producer co-ops in Britain (See page 31).