Farmers are urged to join fixed milk price scheme in bid to end volatility – eDairyNews
Countries Ireland Northern Ireland |16 mayo, 2016

Dairy industry | Farmers are urged to join fixed milk price scheme in bid to end volatility

Suppliers to Northern Ireland’s largest milk processor are being asked to consider joining a voluntary scheme to fix their milk prices for the next 31 months.

In the letter to dairy farmers Lakeland Dairies, which operates both north and south of the border, asks farmers to consider signing for a fixed rate of 21.75 pence a litre, which sits substantially above the current milk price.

Participation is voluntary and farmers can decide to put either 5% or 10% of their annual milk supply into the scheme, which is also being offered to Lakeland suppliers in the Republic.

Michael Hanley, Lakeland Dairies group chief executive, explained that the scheme was designed to help farmers manage milk price volatility.

He said: «We want to ease the burden of current dairy market volatility for our milk suppliers. As a farmer-owned co-operative society, we are committed to paying the highest possible milk price in line with market conditions.

«We’re very pleased to be in a position to offer this additional new support to our milk suppliers. The new fixed milk price scheme will benefit participating milk producers with a greater level of certainty and stability.»

A statement from Lakeland Dairies Co-operative said the scheme would help milk suppliers cope with continuing dairy market volatility.

The scheme aims to provide better certainty on milk price for a fixed proportion of milk and is the first of this kind of scheme to be launched by any dairy processor in Northern Ireland.

In March farmers here received on average of just over 18p a litre.

The price of milk has long been a bone of contention, with many dairy farmers arguing they are being paid unfairly.

Many describe the current situation as a «crisis» and say they are being paid below the cost of production.

However, processors say oversupply means they are unable to offer farmers more money for what has become a global commodity.

Milk prices have been falling since the first quarter of 2014. In just over two years the milk price has almost dropped by half.

Prices have begun to stabilise, but the downward trend continues. Some forecasts predict a low of 14p a litre.

In January 2014 the price paid to farmers for each litre was on average 34p in Northern Ireland, compared to 18p in March this year.


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