Industry gets behind 3p/litre milk price hike

SUPPORT IS growing across the dairy industry for the milk price cost initiative, which aims to pass back at least 1.5p/litre more to milk producers.

Gwyn Jones, NFU dairy board chairman, said steady progress had been made on plans to bill buyers 3p/litre more for all milk, so the money can be shared between producers and processors.

“It is not going to be easy but I can”t see why it shouldn”t happen,” he said. “We [the NFU and Farmers For Action chairman David Handley] have more or less got verbal agreement from everyone we have spoken to. We expect the co-ops to start invoicing fairly soon.”

Mr Jones acknowledged that the union and FFA had to “chase down” middle-ground buyers so they did not undermine the situation. He also admitted that some people were concerned that the initiative could draw the attention of the Office of Fair Trading, although he himself did not think the OFT would be a problem.


“It is certainly not an issue for me. This is the industry behaving in a way it would if the market was working properly. I”ve no worries about the OFT investigating the dairy industry.”

A spokesman for Dairy Farmers of Britain confirmed the co-op was working with buyers to get a price increase. “We are putting those prices through to customers. We are actively working to achieve that.” Barry Nicholls, Milk Link”s chief executive, said any move to improve the return to dairy farmers was also something Milk Link naturally welcomed.

“Having had initial discussions with a number of our customers, we are due to meet in the next week with the FFA and NFU to discuss further the mechanics of their proposal.”

A spokesman for First Milk also emphasised its support for the initiative. “We are doing everything we can to make it happen. We start the New Year with a new sense of optimism.”

Arthur Reeves, managing director of direct supplies at processor Dairy Crest, said working with a blanket figure of 3p/litre was difficult, but price increases were certainly being sought.

“I endorse the work that the NFU and FFA have been doing. It is really bringing the issue into focus and making people much more aware of the need for a price increase.”

The Royal Association of British Dairy Farmers said it was also giving its backing to the initiative as a 3p/litre rise was required on all milk merely to cover increased dairy industry costs.

RABDF chairman Tim Brigstocke said over the past two years dairy farmers had seen a 30% price rise on fertiliser, 10% on energy costs and a 5% hike in wages.