Dairy Crisis Meeting - Minister O Neill
Present – Banks, UFU, Dairy Processors, DARD, and NIGTA. Present for the first time - Finance Companies, Rural Support, Farmers for Action, Fair Price Farmers.
Minister O Neill welcomed everyone and spoke of the immediate issues of cash flow on dairy farms and the need for strategies to manage volatility in the longer term.
Dairy processors (David Dobbin and Paul Vernon) reported that milk production was still increasing and there were concerns about sufficient processing capacity to cope with all the milk which will be produced in Ireland & UK this spring. GB production is up 5% and Ireland up 10% year on year. The oversupply of product is pulling prices down and we will reach 15p/litre in the next few months with no prospect of recovery in 2016. An effective Intervention for dairy product is still the best option and the weakening value of sterling will help the price but intervention is filling up fast and the current allocation will be filled by mid April.
UFU (Ian Marshall) said that the situation had deteriorated significantly since the last meeting in October.
Danske Bank (Robert McCullough) reported that overdrafts had been increased, capital moratoriums’ introduced and additional loans arranged. There were big variations in individual farm situations but debt was climbing and many farmers were facing harsh decisions. Minister stressed that the industry needed support from the banks at this difficult time! (Is this helpful? – could be building up debt burdens for the next generation of farmers).
NIGTA (RI) reported that the farm payments received in December had provided some respite but since then cash was drying up on farm and debtor days were increasing. Fertiliser purchases were not happening and there was concern about how they would be funded. Majority of fertiliser is supplied through the family merchant businesses. RI stressed the importance of communication with farmers – they need to understand the outlook for milk price and be realistic about their own cost of production to budget for the future.
DairyUK are convening a supply chain group (NIGTA have been invited to participate) which will look at managing margin and will report in October. An international dairy conference on 11th March will look at issues of profitability/volatility on dairy farms.
DAERA Stakeholder Event.
As part of the restructuring on the NI Civil Service the Stormont Executive have decided to reduce the number of departments from 12 to 9. Agriculture and environment come together to form -
Department of Agriculture, Environment and Rural Affairs. (DAERA)
Noel Lavery, DAERA Permanent Secretary (designate) introduced his deputies – David Small, Environment and Marine Group, Louise Warde Hunter, Central Services and Rural Affairs Group, Robert Huey, Veterinary Service and Animal Health Group (including FBI). 1 more deputy is still to be appointed to head the Food and Farming Group. Budget for 2016/17 - Resource £197.9m - Capital £48.8m.
This incorporates a 5.7% discount and ongoing reductions of 5% per annum are anticipated.
Strategic goals for the new department include - a more competitive, high performance, knowledge based agri-food sector with higher levels of regulatory compliance. Environmental goals include – more water at “good” status, high quality habitats and landscape, jobs created in rural areas and improved rural services. It is hoped to streamline regulation and maximise use of assets. An ongoing review of official controls, inspections and advisory services will conclude this year.
February 2016
Meeting with Environment Minister.
The meeting with Minister Durkan had been requested following his announcement that he intended to introduce a climate change bill. NIGTA outlined the work which had been done to reduce the phosphate content of both feeds and fertiliser and this had delivered benefits in terms of water quality. Farmers were being encouraged to analyse soil and make maximum use of farm manures to further reduce farm phosphate balances. The trade had also played its part in the Greenhouse Gas Partnership initiatives and through the Feed Advisors Register (FAR) network was playing a major part in educating farmers under the theme –“efficient farming cuts Greenhouse Gasses”. The effect of well managed pasture in sequestering carbon was highlighted as was the considerable reduction which has been achieved in the intensity of emissions in recent years. The point was stressed that Northern Ireland exports over 70% of its food production – largely to mainland UK, and any restrictions which damaged the competitiveness of our product would simply draw in imports from regions with a poorer environmental record.
NIGTA meets IGFA.
A very constructive meeting with the Irish Grain and Feed Trade Association was held in Dublin recently. Issues around some of the EU regulation on medications in feed and the approvals of new GM varieties were discussed and were of concern on both sides of the border. Our hosts were keen to hear about the NIGTA work on environmental issues eg phosphates, Greenhouse Gas Initiatives and the Feed Advisors Register. This was not yet a major a concern to southern businesses. Feed Assurance was discussed – in particular UFAS, Bord Bia and the Food Fortress program which now has 13 members in the south.
The management of major disease outbreaks on farm were discussed - feed deliveries to livestock units are essential but can risk the transmission of disease to other units. Transport protocols to avoid the risk of disease transmission were discussed and it was agreed that there should be a cross border element to any contingency plan developed. Farm debt, as always, was a major concern with milk producers in the North losing money and the southern mills concerned about pig producers. It was agreed that the meetings should be continued on a regular basis and that our associations should work more closely.
Consultations.
NIGTA’s response to the proposal for a Climate Change Bill and to the Consultation on the Review of Northern Ireland’s non domestic rating system, which threatens to increase the cost of goods passing through our ports, can be viewed under Consultations on the NIGTA website. www.nigta.co.uk
Diary Date – Our next quarterly lunch is on Thursday 3rd of March with guest speaker Janet Mc Collum, Chief Executive of Moy Park.
Trade Awareness Course – A trade awareness course is being scheduled for late March - please contact Doris if you wish to register delegates - This email address is being protected from spambots. You need JavaScript enabled to view it.
