20 September 2000
British dairy farmers under threat

By Johann Tasker

FARMERS have chosen the first day of the European Dairy Farming Event to warn that hundreds of British milk producers could be forced out of business.

Brian Walters, vice-president of the Farmers Union of Wales (FUW), said dairy farmers will go bust unless milk prices are substantially increased.

Mr Walters is due to attend the opening day of the two-day European Dairy Farming Event at Stoneleigh, Warwickshire, which runs from 20-21 September.

“Many farmers are at the point of no return,” he said.

“I fear that we will see a dramatic increase in the number of farmers giving up production unless there is a substantial increase in the milk price.”

The FUW claims that average prices paid to farmers for their milk is now 15.34ppl, compared with more than 25ppl just three years ago.

“Many farmers have responded to the low prices by selling their milk herds, while others are having to claim state benefits to make ends meet, despite continuing to work up to 95 hours a week on the farm,” said Mr Walters.

Despite the problems, many consumers are probably unaware that producers are getting less for milk because the price in the shops has not fallen, he added.

Although Asda and Safeway have announced a 2p rise in the price they pay farmers, shoppers are still paying anything from 25p to 40p for a pint of milk.

Mr Walters said: “This is a step in the right direction. But the FUW will not be satisfied until farmers can once again make a decent living and no longer have to rely on state benefits to put food on the kitchen table.”

Meanwhile, a report by the National Farmers Union records for the first time the dramatic collapse of the British dairy industry over the last three years.

The report, British Milk – What Price?, analyses the factors which have led to British farmers receiving the lowest prices for their milk in 10 years.

Despite the depths to which the industry has slumped, the report shows that market indicators point to a desperately needed price increase to producers.

It aims to provide market intelligence amid ongoing negotiations on milk prices taking place between retailers, processors and farmers representatives.

The report will be distributed to processors, retailers, producers and opinion-formers at the European Dairy Farming Event.

NFU Deputy President Tim Bennett will speak at the event.

“This report provides an in-depth analysis of exactly how the fortunes of the British dairy industry has unravelled before farmers eyes in the past year,” he said.

“But more importantly it demonstrates clearly that all the indicators in the marketplace show there should be a price rise to producers.”

British milk prices are languishing at the bottom of the European Union league table. The report says three factors contributed simultaneously to the collapse.

These were an over-supplied global dairy commodity market, the strong Pound, and the weak negotiating position of dairy farmers compared to buyers.

But over the summer there have been signs of a dramatic improvements in dairy markets, particularly for products like skimmed milk powder and butter.

Coupled with cost cutting in the processing sector and a fall in the strength of sterling, the future looks brighter, according to the report.

Even the promise of a 2ppl price rise by Asda and Safeway is only the start of the necessary return to a sustainable milk price, said Mr Bennett.

“Retailers and processors have laid the blame for the poor fortunes of the dairy sector firmly at the door of the marketplace,” he said.

It is now time for the industry to deliver a fair share of these improved returns to producers.”