A rise of almost 15% this week in the Global Dairy Trade (GDT) price index has brought hopes that dairy commodity markets could be on the upturn, after hitting an all-time low at the beginning of August.

But the short-term reality is that prices for July milk supplies in Northern Ireland are down by at least 1p/litre from the main buyers and further price reductions cannot be ruled out for August milk.

Producers in Northern Ireland are in for a tough autumn and winter – a struggle for survival in many cases. And a blitz of political lobbying in recent days has not yielded anything significant yet by way of Government support for farm incomes.

Following a meeting with Defra secretary Liz Truss this week, United Dairy Farmers chief executive David Dobbin said it was clear that the Truss is looking to strong marketing of British dairy products to consumers as the ‘‘solution’’ to the current industry problems. Dobbin, who was present in his role as vice-chair of Dairy UK, said he got no indication that Truss would press for intervention purchases of dairy products by the EU.

Meanwhile, dairy farmers and processors in NI are at the most extreme end of the problem, with high dependence on exports in an oversupplied market where low prices are hit by the exchange rate back into a relatively strong pound sterling. Some local product has been offered to EU intervention at the current low price equivalent to around 14p/litre of milk. With previous higher priced contracts coming to an end, most processors in NI have been paying out more for milk than they are bringing in from sales of products, especially commodities such as milk powder.

Dobbin does not see the Northern Ireland Assembly making funds available for any rescue scheme or hardship payment in NI and feels that pressure must be directed at the European Commission, with the only possible source of funding being the superlevy windfall that has been paid to the EU on over-production of milk in the final year of quotas, which ended in March 2015.

It appears that the European Commissioner for Agriculture and Rural Development, Phil Hogan, is prepared to hold out until Christmas or early 2016 before making any moves to provide any sort of special support. This is in the hope that dairy markets will be showing some improvement by then as a result of cut-backs in production in New Zealand and elsewhere.

ASDA 28p/litre shared across Dale Farm milk

The promise by ASDA to pay the equivalent of 28p/litre for milk that it retails for consumption as liquid will provide a small increase on the amount that was already being paid for that milk in NI. But along with falling prices for butter made from the cream that is skimmed off during the processing of that milk, the return to the processor will not be enhanced.

Supermarkets selling liquid milk in NI account for less than 5% of the total milk output from local farms and they pay a premium for it. When the relatively small volume of milk that goes for retailing as liquid milk in NI at that relatively good price is combined with the much larger proportion of the milk that goes into the currently low priced milk powder and butter manufactured products, the effect on the overall price for milk is very small.

Asked about the deal with ASDA, Dale Farm chief executive David Dobbin said the retailer has openly recognised that its supplier of liquid milk in NI is a farmers’ co-operative committed to sharing the revenue from its sales in a milk price paid across the members. This is the same as in Britain, where the producer co-op Arla is the processor supplying ASDA. So, there is no stipulation by ASDA for the processor to pass on to the actual producers the higher price it receives for that milk.

There had been fears that retailers, in the face of protests by farmers, might press for their higher prices to go directly to the suppliers of the milk. This would provide a boost in prices paid to around 50 suppliers to Dale Farm, and could have been divisive by separating them from other producers whose milk is going into manufactured products.