Listen: Northern Ireland dairy sector at a standstill at Balmoral Show

While families and pedigree enthusiasts thronged the aisles of the Eikon exhibition centre this week, some of the stands selling big pricetag items remained very quiet.

Manning a deserted stand exhibiting shiny parlour equipment, a distributor told the Irish Farmers Journal this has been the worst business he has had in 23 years exhibiting at Balmoral. “The industry is on its knees,” he said, citing low prices and lack of clarity on capital investment grants due to start later this year as part of Northern Ireland’s rural development programme.

“The only positive is that the business is not going anyone else,” the distributor said, adding that sales were still good south of the border.

Pedigree breeders feeling the pinch

Pedigree breeders, too, are beginning to feel the pinch. “You need a good commercial base to put a bottom on the market and everybody is under pressure at the moment, cash flow is tight,” dairy interbreed winner Ashley Fleming told the Irish Farmers Journal. “Our animals are slower to move at the present time – although Jerseys are gaining popularity because of their fat and protein so there is quite a bit of commercial interest in them. But the price is not as good as it was in the last few years,” said the owner of the 120-strong Jersey Potterswalls herd in Saeforde, Co Down.

Make cows work hard at grass and get geared up to make quality silage

In this climate, the sudden improvement in weather is welcome, and CAFRE dairy advisor Ian McCluggage urged farmers to make the most of it. “Now is a critical time for farmers, against the backdrop of poor milk prices, to make maximum use of quality grass and forage,” he said. “Walk your farm, know what coverage is in front of your cows, make cows work hard at grass and get geared up to make quality silage over the next few days.”

Focus on breeding

Improvement on costs inside the farm gate are the best option to weather the storm, with “every 1-1.5p/l counting”, McCluggage said. He also advised farmers to pay more attention to breeding decisions at this time of year.

Cormac Cunningham, dairy farmer and director of Strathroy Dairies, agreed: “Pick the right type of bull: although milk prices are on the floor, those key decisions will not cost you any more, but will be standing to the farmer in two to three years’ time when those young heifers hit the ground,” he said.

With two farms – one grass-based, the other high-input – he says neither is making money at current prices.

Listen to a discussion with Ian McCluggage and Cormac Cunningham in our podcast below:

Supply control gaining traction

The oversupply crisis is leading a growing number of Northern Ireland farmers to adhere to the idea of voluntary production cuts.

On Thursday, Coleraine farmer Metha McAleese told the Irish Farmers Journal that “there should be some sort of curb in production by the processors or by quotas being introduced again”.

Gary McHenry, who milks 250 cows with his son outside Lagan in Co Armagh, is also among those who think that agreement is needed at European level to reduce milk supply.

“Between Oceania, the US and Europe, an extra 4.5bn litres were produced in 2015; 3.5bn came from Europe: this is a European problem on a global market,” he said. A member of the organisation Fair Price Farming NI, he is looking for broader support for so-called article 222 measures, which are currently open under EU legislation for processors and farmers to work together to reduce production and increase prices. An online survey is under way to gauge support for such measures among European farmers.

What we do on this island of Ireland in terms of cutting production will have negligible impact. This would have to be certainly on a Western Europe basis

Asked about the proposal, McCluggage warned: “What we do on this island of Ireland in terms of cutting production will have negligible impact. This would have to be certainly on a Western Europe basis.” He also questioned its political feasibility many regions including the Republic of Ireland “fought hard to remove milk quotas”.

Srathroy’s Cunningham said that “the idea has a lot of merit,” but he added:

“To actually get it into place would very difficult to do – to get European-wide solidarity to do it. But unfortunately, I think that a reduction in European production will happen whether we want it or not, simply because farmers will go out of business.”

“A lot of waste and duplication in the dairy industry”

In search of a silver lining, Irish Farmers Journal dairy editor Jack Kennedy said the current price crash highlighted avenues for improvements at co-op level. “There is still a lot of waste and duplication in the dairy industry,” he said at Friday morning’s Balmoral Show breakfast briefing. “We’re doing the same thing north and south of the border, with too many people at administration, IT, management levels doing what is needed to produce the best dairy products.”

Kennedy said that the sector needed to centralise many of those functions further. “If this crisis can help us address that, it could be a good thing.”

Read more

Full coverage: Balmoral Show