Farmers who supply a Northern Ireland-based dairy cooperative are facing a “double blow” of not receiving a “promised bonus” on top of a 1p per litre milk price reduction.
There are reports that LacPatrick producers will not be paid their bonus this month, amid a penny per litre reduction in LacPatrick's base price.
The dairy cooperative was formed in July 2015 as a result of the merger of Ballyrashane and Town of Monaghan co-op.
LacPatrick supports 700 local farmers and possesses processing facilities on both sides of the Irish border.
In October, the green light was given for LacPatrick and another dairy company, Lakeland, to merge.
But the Ulster Farmers' Union (UFU) describes recent events at the cooperative as “worrying” for farmer suppliers.
UFU President, Ivor Ferguson said: “It seems LacPatrick members are paying for previous mistakes and that banks are now influencing the milk price, leaving a bad taste in the value banks attach to the family farm businesses.
“It is unfair that LacPatrick cooperative members should have to pay for past mistakes,” he said.
'Widening price gap'
The UFU explained that in October it was assured by LacPatrick that everything was in place for a smooth transition to the merger, with the only issue the wait for formal approval from UK and Irish competition authorities.
The seasonal bonus is a structural tool, where milk has been produced in the knowledge that this payment would be paid, and farmers have already factored it into their own cash flows and business decisions.
The payment is seen as vital to underpin costs in what will be a costly winter for all dairy farmers, because of pressure on fodder stocks and high feed prices, the union said.
“Now we are concerned about the widening price gap for LacPatrick suppliers – not only against other milk buyers but when set against Lakeland prices in the run up to the merger,” said the UFU President.
He urged the banks involved to play fair by allowing the bonus payments to be released. “As a business about to merge, which is seeking goodwill from farmers, LacPatrick and the banks needs to steady the ship now to ensure that its members see a fair return for the milk they are producing,” said Mr Ferguson.
