'Out of season milk bonuses are temporary, farmers need a sustainable long-term market cost': Money from rising prices not coming to dairy producers, says UFU
Out of season bonuses for dairy farmers aren’t enough to keep producers afloat long-term, a farming body has said, calling for better prices at market all year round.
All six of Northern Ireland’s major milk processors offer winter bonuses, awarding extra payments of around 3p per litre over several months.
The exact amount and timescale of the bonuses variers per company, different firms offering them to dairy farmers for anywhere from three to five months over the off-season.
The move is held to incentivise farmers to keep production up during the winter months, and provides a boost to their incomes in what would normally be a comparatively fallow period.
With the extra payments now about to click in for producers all over Ulster, a body representing farmers says that while the bonuses are welcome, the industry as a whole needs a “fair and meaningful increase” in the base price of milk at market in order to cover costs.
And the Ulster Farmers’ Union (UFU) went on to suggest that money from rising milk prices isn’t being passed down the chain to dairy producers, despite their own expenses continuing to go up.
The body’s dairy committee chair, Cyril Orr, argued out of season bonuses "must not be used to disguise the need for meaningful and justified increase in the base price paid for every litre of milk”.
He said: “While dairy farmers in Northern Ireland welcome the recent announcements from processors of bonuses to monthly milk cheques, any increase in base price cannot be hidden by the application of seasonal bonuses.
“These bonuses are temporary; farmers need a sustainable, long-term base price that reflects market returns and the realities of milk production.”
Mr Orr pointed to recent developments that have seen dairy products increase in price at market, but maintained cash from those rises isn’t coming into the pockets of farmers – despite producers continuing to battle against increasing demands on their finances from the impact of the cost of living crisis on agriculture and livestock.
Key dairy products have seen substantial boosts in the last few months, he said, with major rises in the prices of both standard and skimmed milk powder internationally, while UK mild cheddar has increased by 14%.
At the same time the summer’s heatwaves impacted milk yields, he added, the resultant fall in the volume produced meaning there are “opportunities for stronger market returns”.
He said: “While global demand for dairy products continues to grow, the rate of growth is slowing, which is helping to support commodity prices.”
According to the UFU’s own methods of measuring the market, the price of milk has gone up by 19% within the last four months.
But at the same time production expenses are still increasing, with a recent 25% rise in the price of feed per tonne predicted to happen again early next year while high fuel, power and fertiliser prices continue to put pressure on farmers.
Said Mr Orr: “As commodity returns continue to strengthen, these gains must be passed fairly down the supply chain and back to dairy farmers.
“A sustainable milk price is essential to allow farmers to cover rising costs, continue investing in their businesses and maintain future milk production.”