Farmers Focus- Tim Gue

IF, LIKE me, you have had dreams that made no sense, then the Alice in Wonderland world of milk marketing will have a certain familiarity. The processors have, over the years, used every excuse to justify driving the farmgate price of milk down and are at present on a crusade to grab our dairy premium – before we even get it – via further price cuts.

We supply ARLA and were told of the “great news” when they secured the ASDA business. It”s been good news for the supermarkets, which were driven to secure their supply post-MTR and, having done so, have also reduced their price at the same time. Another rabbit pulled from the hat.

In the meantime, the good news has given us a 0.4p/litre price cut, while those who are lucky enough to be in an ASDA catchment area receive a 0.5p/ litre premium – effectively a 0.1p/litre raise. I have to congratulate the ARLA milk partnership people for representing their members so effectively. They need to remember that every supplier is important to the business.

There is now inequality in the partnership and we are all worse off, not least because of our forced “investment in ARLA”. It seems that investment in Asda/Wal-Mart may have been more appropriate.

What is worrying me now is that while many believed that an exodus of producers should bring upward pressure on the milk price, what may happen is that reduced plant throughput could bring inefficiencies that may be passed back to producers.

A crazy thought, maybe, but while world milk product prices are firming and longer-term trends look good, history tells us supermarkets will not allow “the market” to dictate their milk price and unless processors get a grip, we will continue to have the lowest prices in Europe.