UFU dairy chair Mervyn Gordon said: “Retailers, as well as processors, need to be supporting farmers so they can receive a fair return from the booming dairy market which will help significantly in managing the extra expense they’re currently enduring.
“As reported by Arla, the price of liquid milk in shops (up to 2022) is seven percent lower than what it was 10 years ago, despite the thriving dairy market. “If the price of milk and all dairy products in stores does not rise correspondingly, come later in the year, Northern Ireland (NI) could be set to endure a milk scarcity because farmers can no longer keep up with the skyrocketing costs of producing high-quality milk.
“If they can’t cover the basics, how can they be expected to continue running a farm business that is supposed to support a family and home?”
The UFU says it carried out an analysis of the retail price of liquid milk which showed that in February 2022, the average pint of milk cost 49p (86p per litre).
By week March 28, the average pint of milk cost 60p (£1.05 per litre) – an increase of 22 percent. However, last month the average base milk at the farmgate only rose by 1.75p.
Meanwhile, fertiliser prices in NI are at the top end of the global scale with over 300 percent inflation, fuel has more than doubled with red diesel costing £1.05/litre and animal feed prices continue to hit record levels.
Mr Gordon contined: “When dairy products are doing well in the market with prices rising, you would normally see an increase in the amount of milk being produced off the back of it as farmers want to take advantage of improved returns. However, the eyewatering productions costs are having the opposite effect.
“On average, 60 percent of direct costs on a dairy farm are attributed to feed, fuel and fertiliser. What’s even more worrying, is that the full impact of cost increases is still to be felt by the dairy sector.
“Farmers are struggling to keep their head above water as it is and if things continue like this, their cash flow will be well into the negative in a matter of months. We need retailers and processors to get behind our dairy farmers and help protect local milk production here in NI, so they can continue producing to meet consumer demand.”