UFU and Holstein NI join forces on call for change to milk pricing

Holstein Northern Ireland has backed calls from the Ulster Farmers’ Union (UFU) for processors to consider forward pricing for milk.

Unlike farmers in other parts of the UK, farmers in Northern Ireland are given prices for their milk the following month after it has been collected.

It’s hoped the changes will give farmers greater certainty and more scope to forward plan for their businesses.

Price takers

UFU dairy chairman Mervyn Gordon explained that Northern Ireland’s dairy farmers are stuck as price takers.

“Now is the time for a change of approach to put dairy farmers in a more sustainable position,” he said.

“This has to be built on a pricing structure that would allow farmers and processors to work together in a better way.

Put simply, farmers need to know in mid-September the price they will receive for their milk in October. That is not much to ask of an industry that fully understands its market.

The position here contrasts with the rest of the UK and much of Europe. Retrospective payments mean farmers do not know what they will be paid for the milk they are producing today.

The UFU said this can leave farm businesses in some instances unable to manage cash flow effectively.

“We cannot continue being price takers. We need a modern pricing structure for a modern industry – not one that has its roots in the past,” Gordon added.

“This is an important first step to a more modern industry and one that would do a lot to improve transparency.”

Holstein Northern Ireland chairman Charlie Weir said: “We would welcome a move away from retrospective pricing by milk processors in Northern Ireland. Other sectors all receive a price for their produce before it leaves the farm.

A price for next month’s milk will enable dairy farmers to make management decisions which should increase the profitability of their business.

“This would also bring dairy farmers here into line with common practise throughout the rest of the UK.”