By FWi staff

SOUTHERN Co-operative Dairies has run into trouble over its decision to cut farm milk prices since 1 December.

The company wrote to producers in November, warning them to reduce milk output or face lower prices.

It said it was having difficulty selling surplus milk on depressed spot markets.

The NFU claims it has received numerous calls from angry dairy farmers, and is investigating the 0.7ppl cut.

Producers now receive just 19.01ppl.

The union believes the reduction may be in breach of the Hampshire-based companys contract.

NFU south-east policy adviser William White has sought legal advice.

The companys contract and pricing schedule appears to fix the price to the farmer from October 2001 until March 2002, he says.

Mr White sent a letter to Keith Bassant, SCDs milk supply manager on 12 December, asking him to reinstate the 19.71ppl price.

But Mr Bassant said that as long as the company kept above its minimum guaranteed price of 19ppl, he believed it was within contract terms.