The Ulster Farmers’ Union has confirmed that the milk price indicator (MPI) is to be reinstated to give dairy farmers an indication of returns from commodity markets.
The Union has said that the calculation of the reinstated MPI will be unchanged.
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The MPI was developed in 2013 in response to the ending of United Dairy Farmers’ milk auction, but was dropped from public view when markets dipped below the prices being paid by milk processors in NI.
“Publication was suspended in late 2014 after claims it talked down milk prices. These were proved wrong when continued calculation of the MPI accurately reflected market returns and the milk price in Northern Ireland,” the UFU said in a statement on Thursday.
Sources indicated in October that pressure was mounting for the MPI to make a comeback to the public arena following frustration within the UFU with the delay in NI milk prices rising with improving dairy commodity markets.
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“This will be a useful tool for both dairy farmers and processors. It will give a broad indication about what the market can return, but it cannot provide an exact milk price figure,” UFU dairy chair William Irvine said.
Calculation
The Union has said that the calculation of the reinstated MPI will be unchanged. It is based on existing industry market calculations of actual milk price equivalent (AMPE) and milk for cheese value equivalent (MCVE).
These are then adapted to analyse prices in local, European and global dairy commodity markets and do not include processor margins or transport costs.
The MPI is to be published fortnightly on a Friday on the UFU website and in the UFU members’ bulletin.
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The MPI was developed in 2013 in response to the ending of United Dairy Farmers’ milk auction, but was dropped from public view when markets dipped below the prices being paid by milk processors in NI.
“Publication was suspended in late 2014 after claims it talked down milk prices. These were proved wrong when continued calculation of the MPI accurately reflected market returns and the milk price in Northern Ireland,” the UFU said in a statement on Thursday.
Sources indicated in October that pressure was mounting for the MPI to make a comeback to the public arena following frustration within the UFU with the delay in NI milk prices rising with improving dairy commodity markets.
“This will be a useful tool for both dairy farmers and processors. It will give a broad indication about what the market can return, but it cannot provide an exact milk price figure,” UFU dairy chair William Irvine said.
Calculation
The Union has said that the calculation of the reinstated MPI will be unchanged. It is based on existing industry market calculations of actual milk price equivalent (AMPE) and milk for cheese value equivalent (MCVE).
These are then adapted to analyse prices in local, European and global dairy commodity markets and do not include processor margins or transport costs.
The MPI is to be published fortnightly on a Friday on the UFU website and in the UFU members’ bulletin.
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