Arla Milk Link members are facing a 0.23p/litre price cut with just four days notice.
The processor has blamed currency fluctuations for the price cut, with an exchange rate mechanism forming part of the merger between Arla Amba and Milk Link last year.
Members will now receive 28.6p/litre for a standard litre (before deductions for seasonality, balancing or capital retentions), making it one of the lower milk prices in the UK.
“This price cut will be a bitter and unacceptable blow to farmers facing record high costs of production,” said Mansel Raymond, chairman of the NFU dairy board. “We urge Arla Milk Link to urgently seek ways to further mitigate against the damaging short-term effects of the transitional milk pricing formula, on these already beleaguered farming businesses. The NFU will be seeking urgent discussions with Arla Milk Link on behalf of our members who are affected.”
Paul Candy, who produces 1.8m litres a year at Pyle Farm, Frome, Somerset, said Arla Milk Link members were now receiving 2p/litre less than direct Arla suppliers.
“We are getting about 1.5p/litre below the average cost of production, and yet we can’t leave without giving 12 months notice at best, because co-ops are exempt from the voluntary code of practice. It’s very unfair – we put the money and effort into building the business up, and we deserve to be paid a market price. I adore my job but I’m really questioning whether I want to continue being a dairy farmer.”
Quota trader Ian Potter said the price cut should not impact on other milk processors’ prices, as it was not linked to actual dairy commodity values. “Farmers For Action are on amber alert and forensically monitoring developments. It would only take one ill timed and miscalculated move to weld them into action.”
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