FFA considers milk price protests after Arla cut

Farmers For Action (FFA) is planning milk price protests if more processors issue heavy cuts before the end of the month.

About 600 farmers have voted for action since Friday, when co-operative Arla dropped its members’ price by 1.2p/litre , blaming weak global markets for dairy commodities and Russia’s ban on Western food imports.

FFA’s committee wants 1,000 votes in favour on its online poll before considering action.

Only two farmers have voted against so far.

See also: Arla Foods reports 16.6% revenue rise

FFA chairman David Handley said more dairy farmers could call for protests if other processors follow Arla’s cut in the next two weeks.

“What we want to know loud and clear, totally transparent, is why is there a necessity?” Mr Handley said.

“We are suffering massive milk price cuts on the basis of a global market when we are only trading 12-15% of production.

“Who is putting on the pressure for the price cuts?

“Is it the milk processors trying to recover margin from the spring or the retailers taking opportunities, going in for the kill?”

Arla’s cut was the fourth in five months, bringing its headline price down 4.63p/litre from where it was in February.

All the milk processors have blamed the sharp fall on plunging world commodity markets, with prices on the Global Dairy Trade auction losing 40% of their value over the same period.

Dairy analysts have said the decline is due to high milk supplies around the world and commodity buyers, particularly the Chinese, acting more cautiously since the start of the year.

In Europe, UK production is running 9% up on 2014, Ireland is 10% higher and in the first five months of the year the whole EU was up 5.4% compared to the same point in 2013.

Further afield, New Zealand production in June was 11.5% higher than a year earlier and Australia was also up 8.9%.

Mr Handley said industry leaders were at fault for encouraging farmers to produce without restraint.

“Farmers were told the global market was their panacea and therefore produce milk,” he said.

“[Industry leaders] should have said, ‘Respond to this with caution, markets are emerging but are not there yet’.”