The Ulster Farmers' Union (UFU) has described a move by discount retailer Asda to pay a minimum price of 28 pence per litre of milk as a "significant development".
The grocer said it will pay the guaranteed minimum price from next Monday following talks with the National Farmers’ Union (NFU) in Britain. The move comes in the wake of protests by farmers, who have seen their margin hit by a major global slump in dairy prices.
"This is a step in the right direction to ensure that consumers continue to have access to high quality locally produced food and it also recognises that farmers need a fair price to produce what consumers and retailers want," UFU president Ian Marshall said.
“The challenge now is to extend this to other retailers and to products other than liquid milk – but it would be churlish on our part not to recognise that Asda has set a welcome trend that we would like to see other retailers and indeed the food service sector follow,” he said.
The changes mean Aldi, Morrisons and Asda in the UK have all committed to pay more than the current average price paid to farmers of 23.6p per litre. German discounter Lidl, which is also in the eye of the storm over milk prices, has so far failed to follow suit.
A Lidl Northern Ireland spokesman said: “Our cost prices are in no way linked to our retail prices and any reductions in retail prices are absorbed by Lidl.”
The average price paid by retailers in the Republic for liquid milk is 34 cent a litre, according to the Irish Farmers’ Association (IFA), which is only marginally higher than the current UK average price.
To cover costs, the annualised price for liquid milk producers in the Republic needs to be closer to 40 cent, the association said.
Costs of production
IFA liquid milk chairman
Teddy Cashman
said the move by a number of discount retailers in the UK to increase the price paid to farmers merely brings them into line with other retailers, such as
Sainsbury
,
Tesco
and Marks & Spencer, which, he said, had recognised the costs of production associated with year-round milk production.
“The current price crisis and farmer action has led retailers to focus on the pressure on producers and the real risk to supplies into the future. . .,” he said.
