“Strong global dairy commodity prices should see an imminent rise in base milk price,” Ulster Farmers’ Union (UFU) Dairy Chairman William Irvine said.
The comments were made as the UFU’s Milk Price Index (MPI) approaches 30p/l.
Increase in commodity prices
“Throughout May, prices for butter and cream rose rapidly. This has been highlighted with Dutch butter prices at a record high.
“Rising milk powder prices are being recorded globally also. This has triggered rises in all of the main market indicators, including AMPE, MCVE and the UFU MPI,” Irvine added.
Irvine continued: “It is undeniable that prices are strong and markets are buoyant. We are long overdue a rise in the base price of milk here in Northern Ireland.”
Calls for price increase
Irvine then explained: “Processors have justified the stalling of price gains for farmers, with claims that recovery in commodity prices is supply-led. But the last six weeks have shown that recovery is, in fact, very much demand-led, making it longer term and sustainable.”
Processors have countered some farmer calls for a base price rise by claiming a gap between fat and protein prices. However, the UFU says that there has been a “significant recovery in milk powder prices”.
It is also reported that “Dutch Whole Milk Powder (WMP) prices increased from €2,680 to €2,950 in the last four weeks and skim prices are well ahead of intervention levels”.
Processors now have no excuses for failing to share market gains with producers. I would urge them to think about the long-game. Looking after farmers when markets are strong helps ensure dairy farm businesses remain viable and ensures their future milk supply.
“Should a milk price boost not come with May payments, processors will have a lot to answer for. Farmers will demand an explanation for unfair treatment,” the UFU dairy chairman concluded.
Calls from Irvine to increase May’s base milk price follow on from three consecutive months of a static base milk price.