By James Garner

DAIRY companies believe that farmers are earning enough money from milk, but producers who attended The Plunkett Foundations annual conference in Coventry on Tuesday (18 September) made it clear that they are after better contracts this autumn.

Jim Begg, director general of the Dairy Industry Federation, told the conference that confidence and optimism is returning to the industry.

“The milk price has gone up from 16ppl in the middle of last year to not far off 20ppl.

“This has been achieved by innovation and packaging development. We have to take milk from a commodity to a high-value premium product.”

But dairy farmer Andrew Chadwick said more money is desperately needed.

“When you consider rent, borrowings and drawings, we are still making a loss. What other industry calls it a profit before it pays its management?”

Others pinned hopes on farmer-controlled processing. Four major supply co-ops – Zenith, First Milk, The Milk Group and Milk Link – have all said they will move into processing and drive costs out of the supply chain.

But Mr Begg cautioned against additional processing capacity. “Its more important to focus on the market. Adding capacity doesnt increase demand.”