With production costs on dairy farms moving into the low 30p/l bracket, and more cost pressure to come over the winter period, the chair of the NI Agricultural Producers’ Association (NIAPA), James Lowe, has called on co-ops to review fixed price contracts.
“Farmers backs are against the wall at the moment, and we are being asked to absorb costs from all directions. Our members simply cannot afford to be selling milk on these fixed price deals,” he said.
Lowe pointed to reports that many businesses within the food and feed supply chain are seeing contracts broken at present, with customers citing “force majeure” due to unprecedented cost inflation.
“There is no reason why the same should not apply to farmers in these fixed price deals. There are young farmers telling their parents there is no way they are coming home to get a price of 27p/l,” claimed Lowe.
Four processors currently have fixed price contracts in place for a proportion of supply, with prices ranging from 26 to 29p/l. Normal top-ups apply for milk quality, but most (outside of Glanbia Ireland) do not pay a winter bonus on milk in fixed price schemes.