UFU comment on spread of farm gate milk prices

Wednesday, 31 July, 2013

In a comment following the publication of the Irish Farmers’ Journal NI Milk League tables for June 2013, the Ulster Farmers’ Union has highlighted the spread of farm gate milk prices being paid by Northern Ireland’s milk processors to their suppliers. 

UFU Dairy Policy Chairman Andrew Addison said; “In recent months, we have seen sizeable gaps between the UFU Milk Price Indicator (MPI) figure and the prices paid by processors for milk. However, in June the gap narrowed and, as we would have expected, some processors were paying some farmers above the 32.58ppl MPI figure for milk. Clearly those processors have developed a strong marketing position; they are demonstrating their ability to extract the value that is currently in the dairy market and are returning that value to their suppliers. Producers are also being rewarded for their efforts to produce top quality milk, in the form of bonus payments for good constituent levels, and rightly so.”

The UFU MPI provides an indication of what the market is capable of returning and the UFU believes that this figure should be closely correlated with the farm gate price processors are paying for milk. 

Andrew Addison continued; “The MPI figure is based on a thorough analysis of market trends and represents what farmers should be paid for their milk. The global dairy market is strong at the moment and we would expect to see a roll on effect here at home. I am pleased that some processors are passing on a fair share of the market returns to their producers but I would like to see those who aren’t, stepping up to the mark and increasing the price they pay to their suppliers.”