Milk prices could fall, warns Milk Marque

10 March 1999

Milk prices could fall, warns Milk Marque

By FWi Staff

Wednesday, 10 March, 1999

DAIRY farmers should brace themselves for a fall in milk prices following the failure of Milk Marques second selling round which was confirmed today.

The farmer-owned cooperative, which is Britains biggest supplier of milk to the dairy processing industry, received bids for just 44% of the milk on offer.

Milk Marque spokeswoman Michelle Conaboy refused to rule out a third selling round and warned that milk prices could fall further for the market to clear.

We cant rule out putting some of the prices down, she told FWi.

Milk Marque had already dropped its prices by 0.7ppl after a first bidding round attracted offers for just 25% of its milk.

Company officials will meet over the coming days with representatives of the dairy processing industry in a last ditch attempt to agree a price before bidding starts again.

Jim Begg, director general of the Dairy Industry Federation, was careful to avoid saying that prices would fall.

But he warned: Its a difficult situation.

Ben Gill, president of the National Farmers Union, said that more negotiations could actually have a negative, rather than a positive, effect.

Further talks could lead to the loss of the better prices secured by Milk Marque last year, he said.

And he warned that the current low prices being paid to dairy farmers are unsustainable and could lead to long term structural damage to the industry.

Farmers must now hope that the Monopolies and Mergers Commission report into the milk industry would resolve vital issues ready for a sustainable future, he said.