Dairy farmers who supply milk to Arla Foods are questioning the legality of certain aspects of the dairy processors’ recent price cut.
One farmer from Yorkshire who contacted Farmers Weekly said his milk cheque would drop by 1.85p/litre because he was producing high butterfat milk.
“We’ve been paid to produce fat so that’s what I’ve been doing,” said the farmer who did not want to be named.
Angus Dalton from Derbyshire said calling some of the cuts a “balancing” charge was simply a way of avoiding the 12-month notice period required before introducing changes to the company’s seasonality payment scheme.
“It is breaking the rules; balancing and seasonality are inextricably linked.”
However, Arla Foods Milk Partnership chairman Jonathan Ovens denied that was the case.
“Seasonality takes money from farmers who produce in the flush and moves it to those who produce on a level profile or during the trough.
“Balancing is saying to farmers that we as a group produce more milk for 10 months of the year than the company [Arla Foods] needs for its demand profile.
I’ve been consistently telling members that there would have to be a cost attached to balancing.”