29 September 1995

Producers plan to remain loyal to their milk buyers

By Liz Mason

MOST producers will stay with the same milk buyer for the next 12 months, a survey at the European Dairy Event has found.

Just three of the 39 producers questioned in the farmers weekly survey said they would be switching their contract. A fourth, who supplies Milk Marque, said he would be keeping his contract with the co-operative under review. None had moved since vesting day last November.

More than three-quarters (77%) said they were satisfied with their milk price and believed it could be maintained at least in the short to medium term.

Fewer than a third were concerned that high milk prices had caused factory closures in the processing sector. Even fewer feared this would cause long-term damage to the dairy industry.

Several rejected the assumption that milk prices were to blame. Instead they believed overcapacity was responsible and closures were an inevitable part of the streamlining process. Producers also unanimously rejected Dairy Industry Federation charges that MM had abused its monopoly position.

Some 69% of those surveyed were MM members. The overwhelming reason for this was their belief that producers should stick together to improve their marketing strength and long-term security.

Price was cited by more than a third (36%) as a reason for their choice of buyer. Transport charges and quality premiums were mentioned by just seven producers.

Other important aspects of a contract included good communication links between producers and management, belonging to a farmers group and service levels.

Almost two-thirds said they found league tables published in the farming press useful. But several had reservations about the information and preferred to describe the tables as interesting. Two MM members added that they would like to see its position improve.

Others pointed out that MM "put a floor in the market" and direct suppliers were benefiting from their commitment to the co-operative.

"If it wasnt for MM the price would be very different," said one.

"We are getting a slight increase in October and we have got to be satisfied with that for the time being," said another.