One issue likely to be raised by milk processors at this years’ Balmoral show is the need to comply with the Fair Dealing Obligations (Milk) Regulations 2024, which came into force from 9 July 2024.

The regulations included a 12-month transition period, so all contracts need to be fully compliant by 9 July 2025.

At its most basic level, the regulations require written contracts to be in place, signed by both the dairy farmer and relevant processor – there are still a small number of NI dairy farmers who have verbal agreements with processors, and that will have to change.

Pricing

When it comes to milk pricing, all contracts must set out when and how payments will be made.

However, beyond that, most NI contracts will have to clearly outline the factors that are used to determine the price paid for milk. Once a monthly price is set, a supplier can then ask for a written explanation as to how the price was determined and subsequently refer this explanation to an independent third party for a professional opinion.

This requirement to include detail around how milk prices are set, does not apply where farmers are “producer members”.

As a result, compliance with the legislation is less onerous for the likes of Dale Farm.

Termination

But perhaps the most important changes for NI farmers are the rules around termination of contracts. A supplier does not have to give more than 12 months’ notice to terminate a contract. In addition, once a notice to terminate has been given, a processor cannot “alter the pricing method or price per unit of milk”.

In practice, it is generally accepted among local processors that if a farmer gives notice to leave and serves out the required 12 months, no financial penalties can apply, to include withholding certain bonuses, etc.

Adjudicator

At the time the regulations were introduced, DEFRA also appointed an Agricultural Supply Chain Adjudicator (ASCA) to enforce the rules. The adjudicator, Richard Thompson, will deal with complaints from farmers who do not have a contract, or the contract is missing something the regulations require.