Dairy contract regulations cautiously welcomed by FUW

Milk producing members of the Farmers’ Union of Wales have given a cautious welcome to the new Fair Dealing Obligations Regulations 2023 – currently in draft form – believing they will bolster good practice within the dairy industry and help stamp out “rogue” milk purchasers.

However, they were less certain about how the new contract rules would help to improve financial stability for producers in volatile dairy markets.

Concerns were also raised at a recent meeting of the union’s milk and dairy produce committee on increased bureaucratic processes and costs for producers.

See also: AB Agri acquires National Milk Records for £48m

The Fair Dealing Obligations (Milk) Regulations 2023 statutory instrument (SI) is due to go before parliament after the summer break, according to the Farmers’ Union of Wales (FUW), and come into force within the next two years.

Brian Walters, FUW acting milk and dairy produce committee chairman, said several previous concerns raised by the committee have been worked into the SI.

Mr Walters said: “Apprehensions remain on the scope of the regulations and how effective they will truly be in providing farmers with a fair price for their milk in light of rapidly changing and challenging markets.

“Dairy farmers need to clearly understand their obligation to seek legal advice prior to accepting any milk purchase agreement and their rights to negotiate various details of the agreement, and to not accept the status quo of a given contract without thorough consideration.”

NFU response

NFU dairy board chairman Michael Oakes commented that improving trust and collaboration across the supply chain is key to supporting long-term dairy production.

Mr Oakes said: “Over the next few months, the NFU will be speaking to dairy farmers about the forthcoming dairy contract legislation and the opportunities we hope this will create to improve co-operation and engagement within the sector.”

The union also hopes to engage with milk purchasers and it is understood the NFU has recently written to dairy processors to dispel fears and seek co-operation within the supply chain.

AB Agri completes purchase of National Milk Records

Global agri-food business AB Agri has finished its acquisition of milk recording company National Milk Records, following its initial offer worth £48m in June.

National Milk Records (NMR) collects milk samples and data from a high proportion of UK dairy farms and the acquisition will help AB Agri to increase its influence within the wider dairy sector.

NMR finance director Mark Frankcom said: “The backing of AB Agri will accelerate and de-risk NMR’s ability to deliver its strategic objectives, streamlining industry processes by creating a holistic business that can provide end-to-end data and analysis to ensure the long-term sustainability, efficiency and profitability of UK dairy.”