GLOBAL DAIRY IRELAND
Darker skies despite price wave Words by: Chris McCullough
I
rish dairy farmers on both sides of the border are riding the crest of a decent price wave for once but it’s not all rosy down on the farm. Feed and other input costs have risen too, which takes the shine off the milk price, but there are bigger issues involving the climate ahead that have got Irish dairy farmers worried. For the first five months of this year milk prices in Northern Ireland have averaged £0.30p (NZ$0.60) per litre, which is 5p per litre higher than the average for the same period in 2020. Across the border in the Republic of Ireland the latest prices released by the main processors are hovering around 36 euro cents (NZ$0.61) per litre for the standard 3.3% protein and 3.6% butterfat, inclusive of bonuses and VAT. Feed prices have been relatively high this year, especially in Northern Ireland, which has put pressure on milk margins. While post-Brexit trade issues are easing as time goes on there are some logistical challenges remaining for Northern Ireland farmers who buy inputs on the United Kingdom mainland. This is down to the controversial Northern Ireland Protocol, a system devised by the European Union and 22
‘Through the potential for carbon leakage, the world will be heavy if we cannot begin to differentiate between emissions from cars and emissions from cows.’
UK to prevent checks along the land border between Northern Ireland in the UK and the Republic of Ireland in the EU, post-Brexit. However, milk trading in the UK has recovered more towards levels witnessed pre-Covid-19 which is good news for Northern Ireland dairy farmers too. Domestic demand balance between retail and foodservice is expected to gradually shift in the direction of pre-pandemic levels, but retail demand will remain elevated this year. Dairy outlooks suggest global markets might face some downward pressure, due to growing supplies from key exporters and a potential softening of China’s strong demand. UK trade has been improving since the initial shock of exiting the EU, but continues to be challenged by rules of origin and logistical issues.
Dark times ahead Irish farmers might say the clouds that hang over them for most of the year are dark enough being laden with rain, but darker days lie ahead if current climate regulations get official seals of approval. Dairy Exporter | www.nzfarmlife.co.nz | September 2021
