FRENCH DAIRY farmers are facing up to another cut in their milk prices, after a new annual agreement between the main producer, processor and co-operative bodies.

The deal came after seven hours of negotiations and sees the institutional price for 2005 cut by an average 0.2 cents/litre (0.15p). Milk buyers with over 35% butter/skimmed milk powder in their product mix will have the flexibility to knock off a further 0.24 cents/litre (0.17p).

GUIDE

The institutional price in France is used as a guide for each region, which then sets its own local rate. The latest cuts mean that, in Brittany and the Pays de la Loire, for example, dairy farmers will be getting an average 28.8 cents/litre (20.16p) in February, though they may face extra seasonality charges.

The National Federation of Milk Producers (FNPL), representing dairy farmers, described the deal as a compromise that would allow both sides of the industry to survive the recent collapse in commodity markets.

CONDEMNED

But radical French farm union the Confederation Paysanne condemned the price fall in the wake of 5% year-on-year cost increases, and warned of demonstrations. Meanwhile, Irish dairy farmers took to the streets this week in protest at price cuts in their market. Fresh Milk Producers, representing drinking milk suppliers, demonstrated outside seven Glanbia branches on Monday (Jan 31) to oppose the company”s planned 2.2 cents/litre (1.54p) cut.