United Dairy Farmers’ members in Northern Ireland will receive a winter milk bonus later this year, according to the co-operative’s Chief Executive David Dobbin.

“Our milk price has started to edge up and we now plan to pay out a winter bonus in October and November 2015 to encourage our members to produce much needed winter milk,” he said.

“The last six months have been very difficult and our milk price lagged the market and even though we paid every penny of income back out to our farmers it wasn’t enough. European milk output is surging following the decision to spread super levy over three years, however I expect United Dairy Farmers to perform better this year on the back of our investment programme which is now completed. We are up and running and seeing success in building our consumer cheese and butter sales.”

Dobbin confirmed that the business has made its key investments including the large cost associated with the building of cheese stocks.

“We are securing long-term cheese contracts and with our new packing facilities at Dunmanbridge in Co. Tyrone, our investment in Ash Manor Cheese in Wales and in Fivemiletown Creamery, our orders in consumer cheese products are currently running at twice last year’s levels.

“Last year was the first major run for our new cheese plant and we built up a stock of mature cheese over the spring, summer and early autumn, made with milk at a much higher price than now. It takes nine months for cheese to mature, unfortunately when the cheese was ready for sale, prices had fallen.

“We had contracts covering most of the cheese however due to the record local milk output we made more than we originally planned to. It took time to develop new cheese customers but we have now done that, our cheese stocks are falling and most of the more expensive cheese is now largely through the system.”

Dobbin also expects that returns for UK-based milk processors will be affected by the expected surge in EU milk production and the fall in the value of the euro.

“However, as a result of increasing the amount of milk we process into consumer products from 40% to 60%, United’s milk price should be less volatile and we should be able to offer our farmers the opportunity to forward fix some of their supply this coming year should they wish to.”