Mixed views on Arla’s price hold

ARLA‘S DECISION to hold its milk price until Apr 1 has provoked a mixed reaction from farm leaders.

The dairy processor announced last Fri (Dec 17) that it had decided to maintain its present milk price “in recognition of the current difficulties faced by farmers”.

The NFU described the move as “welcome as a step towards better market conditions”.

Tim Bennett, union president, said: “The constant tit-for-tat price battles have to stop. There is upward cost pressure on farmers and processors, which means retailers and others must accept that price increases will have to happen.”

Malcolm Smith, chief executive of Dairy Farmers of Britain, said he was delighted to hear that Arla was going to maintain its milk price.

He was also pleased that it had acknowledged there were considerable inflationary cost pressures on farmers which must be reflected in the milk prices paid by milk processors‘ customers.  

“DFB has for some weeks been calling for the industry to focus on achieving sustainable pricing for all which, with the current cost inflation pressure, should mean price increases through the supply chain of approximately 3p/litre.”

But NFU Scotland‘s president John Kinnaird was less impressed by Arla‘s statement.

“Not a single dairy farmer in Scotland will welcome an announcement which says the milk price is going to stay where it is,” he said. “The milk price should be going up.”

Farmers For Action chairman David Handley agreed and said that he was angry the NFU had endorsed Arla‘s position.

“There is no justification for a price freeze, just as there is no justification for a price cut. The union shouldn’t have agreed with Arla,” he said. 

Mr Handley, who attended a meeting with Arla and Asda on Mon (Dec 20), added that he had told both companies that farmers would be seeking to get the price paid for raw milk up by 3p/litre, which would reflect rising costs.

“FFA is going to encourage the three milk co-ops to put in for a minimum increase of 3p/litre to all their milk processors and customers.

“They and all other industry leaders know, due to cost increases, this is now needed for the dairy industry to survive,” he said.

The 3p/litre could be split between farmers and processors who were also feeling the pinch, he added.