Too little milk in UK
UK dairy firms are suffering from an inappropriate and totally inadequate milk supply, according to the Dairy Industry Federation.
Giving evidence this week to the agriculture select committees dairy industry inquiry, the DIF blamed the Milk Marketing Board and Milk Marque for the situation.
Neil Davidson, DIF president, said the two monopolies had been unreceptive to changes in consumer markets. For the past 15 years there had been a move towards low-fat milk and dairy products, yet both the MMB and Milk Marque had continued to reward producers for butterfat.
And the fact that firms had to dispose of this low value product, usually on the export market, explained why UK dairy exports were worth about 40% less than the products that are imported. But Mr Davidson stressed that he did not blame farmers. "They were getting the wrong signals from these monopolies," he said.
Turning to milk supplies, Mr Davidson described the UK processing industry as "totally hamstrung" by the lack of raw material. Quotas meant the country was not self-sufficient in milk. He added that 90% of the milk processed here ended up on the domestic market. That meant UK firms could not compete in the world market for dairy products because any exports could seriously threaten home supplies.
Milk Marque chief executive, Andrew Dare, later rejected the DIFs allegation that butterfat production was encouraged. "Their argument is spurious. Producers have been paid relatively more for protein than they have for fat for about 10 years now."
The DIF repeated its complaints about Milk Marques selling system. MMs control of the prices meant the true market value of milk had not been established. *