NI dairy farmers had a good year in 2022, but the situation has quickly changed and at current prices of just over 30p/l, many are now operating significantly below costs of production.
We probably have to go back to 2016 to see a similar gap to costs, although recognising that the market back then was in a much grimmer state than it is now, with prices stuck in the low 20s for many major EU countries.
In NI we experienced eight consecutive months of average prices under 20p/l.
At the same time, given current costs, a prolonged period of prices below 30p/l in NI would bring similar challenges as in 2016.
Back then, the European Commission eventually took action by way of a milk production reduction scheme, which paid farmers around 12p for every litre of reduced output over a three-month period compared to the previous year. Uptake of the scheme across Ireland was among the highest in the EU.
Whether by action or design, the scheme had an effect, and what followed has been five years of relative price stability.
While there have been some calls for the Commission to act early and introduce a similar scheme to help cut output, the reality is that farmers in many EU countries are not currently experiencing the low prices being seen here.
The average May price in NI is among Europe’s lowest, and if we compare averages over the last five years we are 2 to 4p/l behind most major producers.
Some of that gap can be explained by low butterfat and protein percentages in our milk, and we also have to recognise we are an exporting region on the edge of Europe, largely dependent on commodity markets.
But we lack a clear marketing strategy for NI food and have watched on while our nearest neighbours have provided lucrative grants to improve efficiency and innovation in milk processing. Our industry continues to be let down by politicians and government.
Read more
NI dairy farmers suffer massive income hit
MPI accurate in base price forecast
NI dairy farmers had a good year in 2022, but the situation has quickly changed and at current prices of just over 30p/l, many are now operating significantly below costs of production.
We probably have to go back to 2016 to see a similar gap to costs, although recognising that the market back then was in a much grimmer state than it is now, with prices stuck in the low 20s for many major EU countries.
In NI we experienced eight consecutive months of average prices under 20p/l.
At the same time, given current costs, a prolonged period of prices below 30p/l in NI would bring similar challenges as in 2016.
Back then, the European Commission eventually took action by way of a milk production reduction scheme, which paid farmers around 12p for every litre of reduced output over a three-month period compared to the previous year. Uptake of the scheme across Ireland was among the highest in the EU.
Whether by action or design, the scheme had an effect, and what followed has been five years of relative price stability.
While there have been some calls for the Commission to act early and introduce a similar scheme to help cut output, the reality is that farmers in many EU countries are not currently experiencing the low prices being seen here.
The average May price in NI is among Europe’s lowest, and if we compare averages over the last five years we are 2 to 4p/l behind most major producers.
Some of that gap can be explained by low butterfat and protein percentages in our milk, and we also have to recognise we are an exporting region on the edge of Europe, largely dependent on commodity markets.
But we lack a clear marketing strategy for NI food and have watched on while our nearest neighbours have provided lucrative grants to improve efficiency and innovation in milk processing. Our industry continues to be let down by politicians and government.
Read more
NI dairy farmers suffer massive income hit
MPI accurate in base price forecast
SHARING OPTIONS