Milk buyers stop must tit-for-tat price reductions and retailers need to act more responsibly if the dairy sector is to have a bright future, says Peter Kendall.
The new NFU president is so concerned about the current state of the industry he has taken the unusual step of writing to all the organisation’s milk-producing members.
In the letter sent this week he said: “Some milk buyers are responding to short-term profit issues by cutting raw milk prices and appear to be positioning themselves to secure volume in any tendering exercises by retail and foodservice customers, using lower commodity prices as a pretext for cutting farm-gate milk prices.”
Mr Kendall said it would be hard to change the market forces operating on the market, but to suggest nothing could be done was “wrong and defeatist”.
He said the NFU was lobbying government and retailers, but farmers also needed to push harder for restructuring in the supply chain.
“Dairy farmers are already making major business decisions on their farms and can make a further big difference by taking a greater control of their own destiny.”
But Mr Kendall said many farmers were locked into unfair contracts that allowed milk buyers to implement price cuts too easily.
“We are utterly convinced that many of today’s milk contracts are not fit for the purpose of ensuring a vibrant, dynamic and, most importantly, a profitable industry.”