Dairy processors are being urged to think long and hard about the implications for farmer confidence if they are considering March and April milk price reductions, by the Ulster Farmers' Union (UFU).

Instead of reducing the milk price, the UFU has said that the dairy processors should pay the full market return to their producers.

Speaking after reports that one processor was considering dropping their base price by a 1p/L for both March and April, UFU Dairy Chairman Jonathan Moore said that this would mean a price as low as 14.50p/L (18.22c/L) for April milk.

This would be well below the minimum the market is returning. If you take the average price for dairy commodity products relevant to Northern Ireland, it is higher than this.

"Dairy farmers being threatened with price cuts know that."

According to the UFU, this price drop would come when farmers are hitting peak milk production, and when family farm businesses are already struggling to stay afloat because of the extremely prolonged period of low milk prices, and the knock-on impact it is having on the wider rural economy.

"We recognise that the supply/demand equation is out of balance, but such savage price reductions are unjustified."

The UFU has raised its concerns with the industry trade body, Dairy UK, and is planning to meet local processors to press the case for base prices remaining relative to what the market is returning.