United Dairy Farmers' commitment to pay suppliers a significant winter milk production bonus has been welcomed by the Ulster Farmers' Union.
United Dairy Farmers is a leading UK dairy co-operative owned by farmer members in Northern Ireland, England and Scotland with a turnover in excess of £400 million per year and employing around 1,000 people.
UFU dairy chairman William Irvine said that since United was the biggest buyer of milk it was 'encouraging' that farmers were set to gain from a policy that reflected what was happening on dairy markets.
"It seems ironic that as the EU’s Voluntary Milk Production Reduction Scheme is being implemented, United finds itself in the position of needing more milk to satisfy the business it has through its Dale Farm brand.
"This is encouraging news for producers – and I hope other processors will follow United's lead to allow farmers to benefit from what is happening on national and global dairy markets," said Mr Irvine.
The UFU, who has just recently completed a series of meetings with local dairy processors encouraging them to pass the recent commodity price gains on to producers, says the United bonus will come as a welcome cash flow boost for farmers at a time of the year when costs begin to climb.
Boost farmers' confidence
Mr Irvine said he was hopeful the winter would bring the combination of a higher milk price and manageable costs.
He stressed however that this would not cure the problem the industry has faced for the past couple of years.
"It is encouraging to see developments like this.
"Price improvements will boost farmers' confidence, but there is a long way to go before the industry is back on an even keel.
"Part of this is clearing the huge debts that have built up operating below the cost of production for such a long time.
"However, farmers are positive by nature, and they will see this move by United as a big step in the right direction,” said Mr Irvine.
The dairy committee chairman added that while some farmers might gain from the EU scheme to cut milk production, this latest development underlines why the UFU was never convinced that the answer to low prices globally was to reduce production here.
“The indications are that markets are recovering and that is why United is offering a bonus, and farmers want to be in a strong position to meet market demand,” said William Irvine.
