An increase to June base milk prices is likely to mean that NI dairy farmers will get less from Stormont's £25m coronavirus support fund than first envisaged.

In the original announcement at the start of July, a total around £11m was allocated to dairy farmers, who were set to receive up to 1.2p/l on milk produced from March to June.

Reference price

That allocation was based on a February reference price of 26.68p/l, and using best estimates at the time, it worked out at a total loss over the March to June period of £15m.

But to allow for the fact that dairy farmers potentially availed of other government schemes (eg self-employed income support and bounce-back loans), DAERA is compensating for 80% of losses, which takes the figure to £11m.

However, the 1.25p to 1.5p/l price rises for June announced by processors over the last week have changed the calculations and will bring the average price paid that month much closer to the 26.7p/l reference price.

It is understood that DAERA officials will work out the losses on a month-per-month basis and then add them up and divide by the total production over the period.

It is likely to mean that rather than getting a flat rate payment of 1.2p/l on all litres supplied (excluding milk in fixed price schemes where the price is above 26.7p/l), farmers will end up with a flat rate payment around the 1p/l mark.

Reaction

While dairy farmers have generally welcomed the support package, some have pointed to the inconsistencies when compared to beef, where farmers are getting compensated for 100% of losses.

It is also the case that as well as the £40 per head payment in the seven-week period from the third week of March, beef finishers will get £33 per head on all cattle killed from mid-February to the end of June. That is coming despite a significant beef price recovery from mid-May onwards.

However, sources explain that this £33 per head payment has been worked out differently to the dairy payment, and it is to compensate farmers for a general fall in the value of fifth quarter products such as hides since the start of the coronavirus outbreak.

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