The Ulster Farmers’ Union (UFU) believes there is “capacity for milk prices to ‘significantly increase’ and has urged dairy processors to ‘follow the lead set by Lakeland Dairies and deliver a strong increase to their base milk price in line with market returns’
Last week, Lakeland Dairies announced an increase in the base price for milk supplied in July in Northern Ireland to 37.3p/l. The base price saw a 1.5p/l increase from the previous month, which includes the 0.5p/l Sustainability Incentive Payment.
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The UFU stated that dairy farmers have endured a challenging 12 months, which has severely impacted cash flow.
The organisation stated: “The coming months offer dairy farmers a chance to improve their balance sheet, but they can only do this if their processors step up with a strong milk price and the market signals are there to deliver it.”
The UFU referenced the latest Global Dairy Trade (GDT) auction results as a key indicator of current market trends.
The GDT price index rose by 0.5% following the auction results published earlier this month.
According to the UFU, this modest increase indicates that dairy markets are ‘looking positive’.
The UFU noted: “This does not sound like much of an increase, however historically, July and August have usually been slow months for GDT auctions.
“The fact that there is a small, positive increase should provide a stimulus with New Zealand coming into its new milk season.”
The latest GDT auction featured 186 bidders, with 35,965 metric tons (MT) of product sold.
The average selling price was $3,680 per metric ton (MT) in an auction that lasted over two and a half hours, involving 133 winning bidders and 18 bidding rounds.
The GDT price index is derived from the total quantity sold in a trading event across all products, contract periods, and sellers.
