Dairy product price rises ‘ painfully slow ‘

MILK PROCESSORS and co-ops need to secure price rises on milk and other dairy products by the end of the month if their claims to be pushing hard for extra cash are to be taken seriously, say industry leaders.

Gwyn Jones, NFU dairy board chairman, said he was convinced most were, but progress was painfully slow. He expected to see results by February. “Surely if they are working as hard as they say they are we should be seeing some results soon. We can”t be negotiating for ever more.

” However, David Handley of Farmers for Action said he wasn”t convinced that the industry was trying hard enough. “For once I”m not blaming retailers. I”ve been talking to them since Christmas and, shown the justification, they say they”ve got no problems. But if people don”t ask for increases they”re not going to offer them.

” Mr Handley said if milk cheques did not rise by the end of the month, he was prepared to start naming the chief executives he reckoned were to blame. “We”re paying people hundreds of thousands of pounds a year to market milk for us and they are doing a pretty poor job of it.

” The discussions are centred around persuading retailers that prices need to rise in line with the extra costs of production on dairy units. These have been put at over 1.6p/litre during the past two years, according to detailed costings figures released by the NFU last week.

Every processor and co-op contacted by farmers weekly insisted that there had been no let up in efforts and discussions with customers were ongoing. But most were not keen to reveal how much progress had been made or when farmers might see any results.

This follows concern from the Office of Fair Trading that an industry-wide move to increase prices could be construed as price fixing.

All of the big processors said they were talking to their customers and endorsed the rationale behind the need for price increases, but said the response had varied from different parts of the market. One said most large retailers were sympathetic, but getting commitments from cheese customers and the middle ground was proving harder.

Arthur Reeves, manager of direct supplies at Dairy Crest, said negotiations were tough and all of the supermarkets were “looking over their shoulders” to see how their competitors would react.

A spokesman for Milk Link said the co-op had sent letters outlining the extra costs to all its suppliers a few weeks ago and the general response had been supportive.

Dairy Farmers of Britain and Milk Link, the other big farmer-owned co-ops, said they were in the middle of discussions and were unable to comment further. “We are trying to get as much as we can for our members,” said a DFB spokesman.