Milk processors in NI must respond to improved market returns and get off the bottom rungs of European price leagues, local farmer representatives have suggested.

Tuesday saw the first bi-monthly GDT event of December, during which the price index rose by 1.6%, making it five positive results from the last seven auctions going back to early September.

Butter and milk powder have also saw a sustained period of price increases at the weekly Dutch Dairy Board auction, boosting the Ulster Farmers’ Union (UFU) milk price indicator to a six-month high point.

Commenting on the current market situation, UFU dairy committee chair Kenny Hawkes said winter bonuses cannot disguise a poor base price in NI and the recovery in markets should have already translated into a 1p/l price rise. He also pointed out that NI has the third worst milk price in Europe.

EU league

That statistic is taken from official monthly price data reported by various milk producing regions within Europe and compiled by the Agriculture and Horticulture Development Board (AHDB).

The data shows the average farmgate milk price paid to NI dairy farmers in September (recorded by DAERA) was 31.51p/l.

That ranks 26th out of a possible 28 places, or the third lowest monthly price. For the same month, the average milk price paid in Britain was 36.51p/l, ranking it 17th across Europe.

Ireland is ranked 22nd, with a sterling equivalent of 35.5p/l.

Low ranking

Closer analysis of the data shows that from January to September 2023, NI milk price was ranked third lowest in Europe in six out of nine months.

NI also finished second lowest in two months and reached its highest ranking of 25th place in May.

Britain peaked at its highest ranking of 14th place in January, dropping to a low of 23rd place by May.

Ireland started 2023 ranked fifth highest on price, but has consistently hovered around 22nd to 24th place in recent months.

Price gap

Our analysis of data from January to September 2023 shows the average price paid to a 750,000-litre producer matching the NI monthly supply profile is 35.02p/l.

That is approximately 2.4p/l lower than the 37.35p/l paid to the average farmer in the Republic of Ireland, producing 500,000l annually on a typical spring-calving supply profile.

The poor performance by NI milk in EU price leagues can partly be explained by the fact we produce milk with relatively low butterfat and protein.

Higher milk solids produced on Irish farms account for around 1p/l in the outlined price gap.

Premiums for volume and cell counts are included within the NI price, which are not payable to Irish dairy farmers.

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