STRATEGIC THINKING by producers now could ensure some of the financial pain experienced since deregulation in 1994 is not repeated, industry leaders have warned.

Andrew Slade, DEFRA‘s head of livestock products division, told the Plunkett Foundation conference at Ansty, Warks, that too much emphasis was being placed on the liquid milk sector as the measure of potential income from milk sales.

About half the market was made up of other processed products and commodities.

“The industry is still talking of producing to quota, not to market requirement – the mindset is still governed by a figure (for quota) set arbitrarily 20 years ago,” he said.

“With CAP reform, we are heading for market liberalisation. Producers must prepare for change.

“The introduction of single farm payments should be seen as a temporary support to help facilitate change (at farm level) to meet the challenges of the new, freer market,” he said.

Farmer-controlled businesses and co-operatives also had to react, warned Roger Evans, producer and chairman of First Milk.

“In this business, there are three parties – producers, processors and retailers,” he said.

“The first two must work together to ensure a fairer share of the profits made from milk are passed along the supply chain.”