The latest milk price indicator (MPI) for NI published by the Ulster Farmers’ Union (UFU) has fallen 1.07p/l to 39.17p/l, the first time the index has dipped below the 40p/l mark since 7 January 2022.
Back then, prices for dairy commodities were on an upward trajectory and the MPI rose to a record peak of 49.08p/l by mid-April. It remained relatively steady until autumn, but has been in decline since then, falling from 48.19p/l in late September to its current level.
Farmers should note the MPI is a forward price indicator, forecasting potential market returns two to three months ahead.
There is also no allowance made for a processor margin or transport costs.
Allowing for 5-6p/l to cover both, the MPI would point to a base milk price in the region of 34-35p/l by March/April.
At this week’s Dutch auction, prices were again down sharply, with butter cut €300/t to €4,300/t and whole milk powder dropping €200/t to €3,450/t.
Meanwhile, DAERA statistics show the average farmgate milk price paid in November 2022 was 51.65p/l, up 15.5p/l on the same month last year and 1.4p/l above the October average.
NI milk production totalled 186.36m litres for November. It is the seventh consecutive month that production is below the same month in 2021.
From January to November 2022, NI milk production stands at 2.32bn litres, down 0.5% on the same period in 2021.