Dairy slump signalled at NI auction and in EU

A 22.52% slump so far this year in Northern Ireland auction milk prices has heightened nervousness for dairy farmers both North and South.

Meanwhile, market deterioration is also evident on the continent, with several member states requesting the European Commission to introduce market measures in response to falling prices.

After a 3.74p/litre drop in milk price at United Dairy Farmers’ latest monthly auction in Northern Ireland, chief executive David Dobbin said the fall reflected the very depressed powder and bulk butter markets.

“At this time of the year, powder represents the majority of the milk purchased at the auction. The reality is that the world is awash with dairy products at present.

“On the back of favourable weather and firmer prices milk supplies have overtaken global demand.

“Dairy commodity prices have been weakening since the end of last year and are still falling. The latest Fonterra price for butter was almost half the peak price achieved in 2011, while whole milk powder was a third lower.

“The EU intervention for butter and skimmed milk powder is set at a totally inadequate level that would only support milk prices at around 17p per litre, and unfortunately there are increasing rumours in the trade that butter could be intervened in weeks ahead,” Mr Dobbin said.

“We will be holding emergency talks with the Ulster Farmers Union and local political representatives to seek their support to encourage the European Commission to be more proactive in managing the market, through the re-introduction of export refunds and improved intervention.”

The Ulster Farmers Union expressed alarm at the price fall, the biggest drop in local prices since Oct 2008.

On the continent, the Polish dairy industry has been hit hardest, with unsold stocks of dairy products growing.

Poland has led calls to the commission to reintroduce export refunds, and increase intervention prices for butter and skimmed milk powder.

However, commission spokespersons said at last week’s agriculture council that it was ready to activate appropriate measures when it considered there was a need, but this was not the case yet.

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