Sour taste to cheap UK milk
Their co-ops have pounced on cheap supplies of milk from the UK, to keep underused factories busy, producing dairy goods for shipping back across the Irish Sea.
As a result of unprecedentedly high milk imports for manufacturing, Irish dairy farmers are losing out on the usual dependence of processors here on Irish milk.
In other words, the supply and demand trend has been altered, and so has the price trend, which is of course set by supply and demand.
Processors here are taking advantage of a 15% jump in milk production on UK farms, compared to 2013. This has exceeded available processing capacity in the UK, so it goes on the spot market, newly christened by those in the industry as “distress” milk. It has become available at about 20c per litre to Irish processors, who add it to local milk which costs twice that price, and achieve improved processing efficiency by keeping expensive plants busy. If it continues to be available, and is brought to Ireland, look out for revolt within co-ops here, as farmers see their milk price cut due to the weakening global dairy market, even as UK milk is brought in.
Dairy farmers can also point to the source of this milk, which is UK processors, and wonder about the implications of audit failures during a recent inspection tour by Chinese officials of UK cheese plants.
In contrast, there was 100% compliance with the Chinese requirements in audits in Ireland.
Dairy farmers can ask if the UK milk going into Irish products endangers our exports, and can ask why any chances are being taken with quality, while farmers here are required to jump a new, higher quality hurdle, in the form of the Bord Bia Sustainable Dairy Assurance Scheme (SDAS) audit.
For the many dairy farmers who also rear beef cattle, there are even more questions, and the realisation that free trade across Europe only works if the price is right.
UK milk processed in Ireland is OK, but beef animals born in Ireland and slaughtered or processed in the UK are not OK.
The major UK multiples — Tesco, ASDA and Sainsbury’s, the biggest purchasers of Irish beef, require only British beef born, reared and slaughtered in the UK, or Irish beef born, reared and slaughtered in the Republic of Ireland.
This hits Irish farmers dependent on live exports to Northern Ireland and to Britain. Irish multiples are not nearly so choosy, including the Tesco stores here. Though Ireland exports 80%-90% of its dairy and beef products, the supermarkets here are happy to import 25% of our drinking milk from the UK, specifically from Northern Ireland.
