Dairy coalition calls for immediate milk price rises
Dairy coalition members have called for an immediate rise in the milk price and improved contracts to help struggling farmers this winter.
The coalition, which consists of various farming unions and dairy groups, met in London this week to agree its priorities to ensure the delivery of a sustainable milk price and the rapid delivery of improved contracts to help British dairy farmers.
It agreed to press for a sustainable milk price, which at least covers the average cost of production, and the immediate acceptance of the terms of the dairy industry voluntary code of best practice on contractual relations between dairy processors and purchasers which was agreed in September.
Coalition members called upon all dairy processors and Dairy UK to focus on delivering the full implementation of the code without delay.
According to latest industry estimates, a break-even cost to produce milk is 32p/litre, yet milk prices achieved on farm are as low as 25p/litre and typical liquid prices are between 29 and 31p/litre.
DairyCo estimates suggest milk production will be down by 7.3% this year as a result of the various pressures on-farm including the difficult weather conditions.
In recent weeks, a number of major dairy processors including Dairy Crest, First Milk and Muller Wiseman, have announced small prices hikes, lifting prices to between 29 and 32p/litre.
“It’s no wonder farmers are frustrated. Costs on farm are increasing daily, milk prices are stubbornly refusing to keep up and, as a consequence, production is falling back.”
NFUS dairy board chairman Gary Mitchell
Sainsbury’s said it was also increasing the price it paid farmers in its dairy development group to 31.59p/litre in the new year.
However, although the prices rises have been welcomed, dairy coalition members said they did not go far enough.
NFUS dairy board chairman Gary Mitchell said: “It’s no wonder farmers are frustrated. Costs on farm are increasing daily, milk prices are stubbornly refusing to keep up and, as a consequence, production is falling back.
“What farmers need now is confidence in the future; a sustainable milk price and real improvements to contracts in line with the contracts code will certainly help with this.
“It may take time to amend contracts, but Dairy UK has been working with us on the code for over a year and processors have had the final approved text since October.”
NFU dairy board chairman Mansel Raymond said farmers were expecting action as a result of the agreement of the voluntary code
“We expect all milk buyers to amend contracts to ensure they are compliant with the code and do it without delay.
“If farmers are to have confidence in the code as a mechanism to deliver better conditions and market returns, processors have to show they are committed to it. In the short term, we expect the default answer of milk buyers to be, ‘yes we will honour the code’ rather than ‘no we’ve not had time to amend your contract’.”
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