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Last week’s meeting between the Ulster Farmers' Union (UFU) and leading processors of Northern Ireland milk has been described as constructive and mutually beneficial by UFU president Ivor Ferguson.
Robust discussions on milk pricing were central to the meeting, with the UFU voicing frustration at current farmgate prices.
However, responding to these concerns, the CEOs of Lakeland, Dale Farm and Glanbia Cheese were critical of the UFU’s milk price indicator (MPI), a pricing mechanism that follows trends in dairy commodity markets.
MPI
The MPI is calculated using data from the GDT and Dutch Dairy Board auctions, as well as the actual milk price equivalent and milk for cheese value equivalent published by the Agriculture and Horticulture Development Board (ADHB) in Britain.
It then converts this information to a relevant farmgate milk price, which is published twice monthly. However, the MPI does not allow for milk transport costs or processor margins.
Review
“To avoid any future friction or misunderstanding, we agreed that we would revisit the components of the MPI in conjunction with our processors, as it has been four years since it was last reviewed,” said Ferguson.
Challenge
The UFU challenged the processors on the growing requirement for accreditation to the Red Tractor quality assurance scheme, as well as debating the future of milk pricing based on constituents, which the lobbying body said needs further investigation.
“Collaborative working is the way forward. Both processors and farmers need to be getting more value for their product and therefore better returns.
"Improved relationships are needed to achieve this and the UFU is happy to work with our processors to collectively improve our respective circumstances,” said Ferguson.
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