THE NFU has called upon Milk Link to rethink its 0.5p/litre cut in milk prices, or face an accelerated exodus from the industry.
South-west dairy board chairman John Daw has written to Barry Nicholls, Milk Link‘s chief executive, urging him to reconsider October‘s price reduction.
Mr Daw, who is also a Milk Link supplier and council member, claimed there was no justification for the cut in a climate of strengthening commodity prices.
If the co-op needed more money for long-term investment, it should raise this through other methods not through cutting the milk price, he said.
“To use a producer price cut to raise funds is hugely damaging to morale, runs the risk of triggering a general downward spiral across the sector… leading to a potential serious shortfall in supplies,” he warned.
Channel Island milk producer Malcolm Huxtable, of Town Living, Stockleigh Pomeroy, Devon, said farmers were despondent about the cut. “This is totally unsustainable,” he said.
Will Sanderson, Milk Link‘s corporate affairs director, said the co-op had to focus on developing its own business, adding that it had held its milk price for six months longer than the other co-ops.
There were two elements to the price cut, he said: to make up for falling revenues in the ingredients division and for continued investment in the business.
Milk Link is holding 35 member meetings across the country and a council meeting has been called for Thurs, Nov 4 in Bristol.