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Farm gate milk prices have been on an upward trend since the summer of 2021, rising to their current levels of around 50p/l.
But how does NI compare on price to other key milk producing regions, such as the Republic of Ireland (ROI), Britain and the EU, in general?
Market analysis published by the Agriculture and Horticulture Development Board (AHDB) collates average milk price for the UK and EU member states.
Shown in the table below are the prices paid in September 2022 across key milk producing regions. All prices have been converted back to a sterling equivalent using prevailing exchange rates.
The largest milk producers in the EU are Germany, France, Ireland and the Netherlands – between them, they account for more than 50% of EU milk production.
Highest milk price
The analysis highlights that in September 2022, it was the ROI that had the highest average milk price at 57.81p/l.
However, this figure is based on an estimate provided to the European Commission by Ireland, rather an actual price reported directly from processors, and is up significantly on the 51.97p/l reported for the previous month.
The September price estimated by ROI is 9.52p/l more than the NI average. The difference in August stood at 4.31p/l.
Looking at milk prices over the last 12 months, the AHDB figures show that ROI has averaged 45.71p/l compared to 40.69p/l for NI.
Some of that difference can be explained by higher milk solids, with farmers in the south producing much higher quality milk. For example, in 2021, the ROI average was 4.23% butterfat and 3.55% protein, compared to 4.10% butterfat and 3.30% protein in NI.
EU regions
The NI September milk price also lags behind two of the leading dairy regions in continental Europe. Both Germany and the Netherlands are ahead of NI on 52.74p/l and 55.16p/l respectively, although some of the difference can again be explained by higher milk qualities.
Germany is the largest milk producing country in the EU, while the Dutch processing sector has a major bearing on commodity price trends across Europe. Dairy farms in both regions tend to be high input, high output systems, similar to those prevailing in NI.
Over the rolling 12-month period ending September 2022, milk prices in Germany and the Netherlands are again higher than those for NI.
September prices across the EU are also ahead of NI with an average of 49.07p/l, although when analysed over a rolling 12-month period, the NI average is slightly higher.
Britain
The AHDB analysis also breaks down the UK price into NI and Britain. For September, milk prices paid in Britain are ahead of NI, although the differential is marginal at 0.6p/l.
However, NI processors led their counterparts throughout the spring and summer, resulting in local co-ops paying higher milk prices over a 12 month period.
With commodity markets at record price levels, NI is in a better position to capitalise than Britain, where around half of milk still ends up in a liquid milk market which tends to be slower to respond to global market forces.
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