Surge in input costs could lead to 'scarcity of milk' in NI

The continuing surge in input costs could lead to a scarcity of milk in Northern Ireland, the Ulster Farmers' Union (UFU) has warned.

On-farm production costs 'rising like never before' has left dairy producers unable to cover their expenses, the union said.

This extra expenditure could work its way further up the supply chain, in turn putting milk supply 'at risk'.

The UFU said retailers, as well as processors, need to be supporting farmers "so they can receive a fair return from the booming dairy market".

"[This] will help significantly in managing the extra expense they’re currently enduring," UFU dairy chair, Mervyn Gordon said.

"As reported by Arla, the price of liquid milk in shops (up to 2022) is 7% lower than what it was ten 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, NI could be set to endure a milk scarcity."

Mr Gordon warned that NI dairy farmers can no longer keep up with the skyrocketing costs of producing 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 carried out an analysis of the retail price of liquid milk. In February 2022 the average pint of milk cost 49p (86p per litre).

By week 28 March, the average pint of milk cost 60p (£1.05 per litre) – an increase of 22%. 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% inflation, fuel has more than doubled with red diesel costing £1.05/litre and animal feed prices continue to hit record levels.

Mr Gordon added: “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% 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."

Retailers and processors should 'get behind' dairy farmers and help protect NI milk production, so they can continue producing to meet consumer demand, he explained.

“It’s long been the UFU’s position that the dairy farmer’s struggle is largely due to the way milk is priced. Farmers’ extra production costs needs to be alleviated by those further up the supply chain.

"Otherwise, there is every likelihood that dairy farmers will reduce output in response to unsustainable input costs,” Mr Gordon said.