Dairy farmers would need at least 21 to 22 pence per litre in summer and 25 to 26 pence per litre in winter to enable them to stay in business and make the necessary investments for the future, Graham Furey, President of the Ulster Farmers Union told the Northern Ireland Grain Trade Association at their quarterly meeting.
Graham went on to outline the various stages of the UFU’s Dairy Industry Recovery Map stating that the aims in the EU sector of the map regarding export refunds, intervention and aids to private storage had some success.
At the meetings with the retailers the UFU had outlined the Belgian example whereby an extra 14 cents per litre was paid by the retailers for milk going to the liquid market. The Belgians spread this extra payment across all of the milk supply. Their situation is similar to Northern Ireland in that 15% of their milk goes to the liquid market. If the same exercise was carried out in Northern Ireland it would equate to a penny per litre or a total of £20 to £25 million and would benefit all dairy farmers.
Another phase of the Recovery Map was meetings with the milk processors where payment on compositional quality, more emphasis on added value products and rationalisation were the topics.
The fourth item on the map was the milk auction. The UFU was not keen on option milk, as in their opinion, it had the potential to sway the market in the wrong direction. The one month auction has been a help.
Graham Furey agreed that farmers could play their part as well since the costs of production of a litre of milk varied from 14 pence to almost 30 pence per litre. Farmers were also facing an increase in the order of 4 to 5 pence per litre in finance charges. Some will be facing the decision of going out of milk production or restructuring.
Commenting on the grain harvest Graham said that winter barley which had been trading at £140 per tonne last year was £102 this year. Barley coming off the combine was actually better value than silage.
He went on to say that the GM situation in Europe was worrying due to the slow approval process for new varieties. This had had a serious effect on the corm gluten market two years ago and was now threatening soya. He pointed out that some member countries automatically vote against these approvals because they misunderstand the situation. The EU is not asking them to approve GM varieties for growing in their own countries but to approve them for imported raw materials which are in short supply in Europe and without which European livestock production could not survive.