PRODUCER PRICES / MARKET SUPPORT
The market situation for virtually all products is very uncertain across the whole of Europe. During the Brexit transitional period, the UK can continue to have access to any EU measures introduced and the UFU will continue to monitor any developments and lobby on this front.
The European Commission has announced a new set of measures to help the agri-food sector in this unparalleled crisis. The Coronavirus response investment initiative plus (CRII+) introduces exceptional flexibility and simplification in the use of the European structural investment funds rural development funding. The UFU have been in contact with DAERA to ensure that they are investigating opportunities to re-direct funds from the NI Rural Development Programme.
Other market support measures are also being considered and the UFU is working through COPA to lobby for a support package to be put in place for various sectors. UFU is also working with the other UK Farming Unions and the British Agriculture Bureau (BAB) daily. BAB is the voice of the UK farmers and is the only UK farming lobby based in Brussels.
The EU farming lobby through COPA has sent several letters to the EC highlighting concerns of several sectors, including dairy, fruit and vegetables, beef and veal and sheep and goats. For the dairy sector, the letter calls on the Commission to “take and enforce the necessary measures so as to ensure that the single market continues to function smoothly” and requests private storage aid for all dairy products. For the fruit and vegetables sector, Copa and Cogeca call on the Commission to allocate a budget outside the CAP budget and to implement a specific regulation on exceptional measures to deal with the serious market disturbances linked to Covid-19. For livestock, the letters call on a “toolbox of measures” to be made available, including the review of EU imports of lamb and high value cuts and activation of market measures, including private storage aid.
The European Commission have announced that they will open private storage aid for dairy (skimmed milk powder, butter, cheese) to the value of €30 million. Private Storage Aid for beef will be provided for a total volume of 25,000t (€26m) and sheep and goat meat for a total volume of 36,000t (€20m). The scheme will allow the temporary withdrawal of products from the market for a minimum of 2 to 3 months, and a maximum period of 5 to 6 months.
The UFU in conjunction with the other UK Farming Unions have been discussing regularly the market situation for all commodities on a weekly basis and has also been involved in several conversations with the DEFRA Secretary of State George Eustice to raise these concerns. All the UK Farming Unions have been in contact with their local levy boards to discuss urgent promotion of red meat products.
Ferry Routes between Great Britain and Northern Ireland
The UK government and the Northern Ireland Executive have announced a package, worth up to £17 million, for operators so that they can continue running freight services on 5 sea routes between Great Britain and Northern Ireland during the COVID-19 pandemic. This is vital for farmers and processors in NI to keep supply chains flowing.
The UFU is in daily contact with DAERA and is part of tri-weekly conservation with DAERA and agri-stakeholders and with Minister Poots. UFU has been stressing the immediate need for action to address the market and income crisis for commodities. UFU has also been in contact with some of the major banks about seeking flexibilities around overdraft/stocking and longer-term loans for farmers.
The UFU President, NIMEA and Dairy UK have also met with the NI Secretary of State and raised concerns around producer incomes and supply chain issues directly with him. The UFU President has also raised concerns directly with the DEFRA Secretary of State George Eustice and has called on him to take immediate action.
UFU are also currently holding discussions with DAERA, the horticulture industry and others, to address seasonal labour availability issues within the horticulture industry. Work is ongoing quantifying the number of workers need, and UFU are exploring delivery model options for the establishment of a local labour co-ordinator / provider., where both farmers and those interested in working in horticulture can register.
Beef Market Update
UFU is in constant contact with NIMEA & LMC to seek stability in the trade. UFU Beef & Lamb Policy Committee have been lobbying to ensure that cattle and sheep are part of any target support programme. UFU has been working with LMC and NIMEA around the conditions facing the sector at present and going forward over the next few months to ensure we have the facts at our disposal.
UFU exposed the imports of Polish beef into the UK in early April. UFU held a UK Livestock Unions teleconference to discuss these concerns. UFU has raised strong objections to bringing in this produce and has highlighted this directly with ASDA, Sainsburys and ABP.
UFU exposed further imports of Polish beef by Doherty & Gray Limited this week. Several UFU members contacted HQ abut concerns of Polish beef being imported and sold locally. UFU has spoken with Doherty & Gray and urged them to reconsider their sourcing policy immediately.
LMC have diverted funding to run a major promotional campaign around NI Farm Quality Assured beef and lamb.
Weekly update on the beef and lamb trade can be found online LMC Market Update.
Update on New Zealand lamb Exports
- Product diverted from China has mainly gone to the Middle East vs EU / UK
- Total February lamb export volumes were down as a result of COVID-19 related market disruptions.
- Processing continues to be impacted by reduced demand (although China picking up) and processing restriction with the introduction of social distancing.
- February exports to the EU were down 7 percent year on year, but were tracking 4 percent up for calendar 2020 following strong January exports.
- It is difficult to predict how the spread of COVID-19 will impact distribution of NZ lamb exports in the coming months. Chinese demand is expected to recover, but EU demand may be affected by the weaker economic conditions.
- There is some sign of the Chinese trade recovering
Weekly Dairy Commodity Update – w/e 11 September 2020
GDT All Product Index $2955 (down 1%)
GDT Cheddar (New Zealand) $3428/tonne (down 0.4%)
GDT Whole Milk Powder $2884/tonne (down 2%)
ZuivelNL Butter (Netherlands) €3400/tonne (up €20/tonne)
ZuivelNL Whole Milk Powder (Netherlands) €2700/tonne (no change)
ZuivelNL Skimmed Milk Powder (Netherlands) €2120 (up €20/tonne)
ZuivelNL Whey Powder (Netherlands) €690 /tonne (no change)
Trigona Dairy Trade Mozzarella €2750/tonne (no change)
The UFU is in regular contact with UK Farming Unions, dairy processors and DAERA on milk supply chain issues and the need for government support. The Ulster Farmers’ Union (UFU) dairy committee have called on Government to take immediate action to counter a pending drop in the Northern Ireland farmgate milk price. Dairy commodity prices are enduring a free fall. The UFU and GB counterparts would like all members to be assured that we are doing everything we can to work with Government, national and devolved, and other key stakeholders to ensure we come through this period with minimum disruption in the chain.
The UK Government have temporarily relaxed competition rules to allow the dairy industry to work together more during the coronavirus crisis. The intention is that the industry will work together to address current market challenges and maintaining productive capacity to meet future demand. The purpose of the relaxation is to enable collaboration between dairy farmers and processors so they can avoid their surplus milk going to waste. Dairy UK and the Agriculture and Horticulture Development Board (AHDB) are leading work to bring the industry together to identify spare processing capacity, how to stimulate demand and how production could be temporarily reduced. We also understand that around £500,000 has been earmarked for a promotional campaign.