The return of the Global Dairy Trade auction to positive territory and the increases delivered by our processors on September milk supplies are very welcome moves for Irish dairy farmers producing below the cost of production.

The auction is not a good barometer for all products, but it is very good on whole milk powder and this week it was up 2.9% to trade at $2,760/t.

Some of this increase must be attributed to the difficult weather conditions experienced in the North Island of New Zealand. We understand that milk supplies in parts of the North Island are back by between 5% and 10% on previous years, which is very significant.

The North Island supply is so reduced that it prompted the chair of Fonterra, John Wilson, to send a note to New Zealand farmer suppliers advising them they will be further reducing the volume of product they offer at the auction by 12,000t in upcoming auctions.

The slight rise in the export commodity market offers only a little solace to Irish dairy farmers producing fresh milk over the high-cost winter months.

We have long held the view that unless companies have premium markets where they can add value to out-of-season product, then the cost of producing this winter milk for the farmer outweighs the benefit. The processors will argue they have invested in steel and they need continuity of supply, but if the farmer is not making a margin at the start of the supply chain, it doesn’t work.

Liquid milk farmers in the Republic of Ireland and a large proportion of dairy farmers in Northern Ireland produce a high-quality product from expensive feed and they need reward not alone for the extra feed, but the labour, energy and resources used to produce that product.