North’s dairy farmers protest as price of milk is cut further

At current prices, many farmers are actually losing money on each litre of milk they sell

A group of Strabane farmers turned up at their local Asda store and cleared all the milk supply off the shelves after the supermarket advertised its own brand milk at 45 pence per pint. Photograph: Getty Images

A group of Strabane farmers turned up at their local Asda store and cleared all the milk supply off the shelves after the supermarket advertised its own brand milk at 45 pence per pint. Photograph: Getty Images

 

Promotional offers designed to woo shoppers through their doors could leave supermarket groups in the North crying over spilled milk this week if a farmers’ protest escalates any further.

Take Asda, for example. It is promoting a “rollback” offer this week across its stores in the North on the price of milk. A pint of Asda’s own brand whole milk currently costs 45 pence. It may be a nice deal for consumers but it is precisely this price level which explains the actions of a group of dairy farmers in Strabane.

They turned up at their local Asda store with about 50 tractors, blocked off a road and proceeded to clear all the milk supplies off the shelves into trolleys which they wheeled to the checkouts and promptly left there.

As protests go, it was not so much daring as desperate.

Ask any of the farmers who took part in the exercise why they did it and they will tell you they did not know what else to do or where else to turn.

Attention-grabbing stunts such as the Asda milk raid are one of the few ways they can get the message across that the North’s 2,500 dairy farms are at crisis point, struggling to survive financially.

It typically costs a farmer 26 pence in the North to produce one litre of milk. Two years ago they received, on average, about 31 pence for every litre they produced. Today they are getting no more than 19 or 20 pence per litre.

According to the North’s Department of Agriculture and Rural Development, to cover all the costs relating to milk production in 2015, dairy farmers would need at least 28 pence per litre to stay in business. At current prices, some farmers could be losing up to 10 pence on every litre of milk they produce.

Livelihoods

If something does not change on the price front – and quickly – many fear the future for farms that have been handed down from one generation to the next will be increasingly bleak.

According to calculations from the Ulster Farmers’ Union (UFU), the body that represents farmers and growers in the North, the local dairy farming industry is about £500,000 a day worse off than it was this time last year.

It is not just dairy farmers who are going through tough times in the North, of course. Many in the farming community – from sheep producers who are getting the worst lamb prices in six years to pig producers and cereal growers hit by the weak euro – are also struggling.

But is anyone to blame for the predicament in which dairy farmers now find themselves?

Is it the supermarkets who sell discounted milk? And it is not just Asda doing this; Sainsbury’s and Tesco are also selling a pint of milk at 45 pence this week.

Or perhaps the fault lies with the European Commission which has removed milk quotas. It operates a system where it intervenes to buy surplus dairy commodities at a certain price but farmers say the price – 16 pence per litre set in 2003 – is no longer realistic.

Or could some of the blame lie closer to home than farmers might like? Did they expand too enthusiastically when prices were high, possibly spurred on by local banks happy to lend to farmers with a guaranteed milk cheque every month? The farmers’ union says local production volumes have risen from 1.3 billion litres in 1984 to 2.2 billion this year.

Or is it that consumers want to be able to buy milk at unrealistically low prices? UFU president Ian Marshall says the farmers are caught in a “perfect storm”, with the weak euro, the Russian import ban on certain agricultural and food products, including milk, and the oversupplied global dairy market as the root causes. A slump in demand because of China’s weakened economy has not helped.

Dairy farmers have also become more exposed in recent years to global dairy commodity markets. Currently a larger proportion of milk produced locally ends up in commodity markets which, in turn, means that prices reflect the fluctuations in the commodity markets far more than, for example, in Britain.

So where does that leave the North’s dairy farmers?

“With milk prices where they are, no farmer can make a margin and those who have invested to modernise and grow their businesses are in the worst position of all,” Marshall says.

“And with no signs of global recovery this year, things will get worse as we go into the autumn and winter, when costs begin to rise for farmers.”

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