Voluntary milk supply limits unlikely to be used in UK

The UK’s main milk co-ops won’t be using a recently agreed European Commission provision to voluntarily regulate milk supplies.

The move allows unspent cash from last year’s €420m (£335m) emergency dairy package to compensate producers for a temporary cut in output.

The UK’s dairy package cash is spent but member states may also pay state aid of up to €15,000 (£12,100) a farmer on this or other measures.

See also: Milk price recovery hopes pushed back to 2017

With so much milk around and competition so fierce, milk buyers would be worried that any reduction in volume would simply mean loss of market share, said NFU chief dairy adviser Siân Davies.

“Arla’s policy is that it will provide a secure home for every litre of owner milk, paid at the Arla price,” said a spokesman. “On this basis we have no plans to restrict supply.”

First Milk has had an A and B pricing mechanism since April 2015, with A volume rising to 90% from 1 April 2016.

The co-op’s core demand was broadly in line with supply and it would not be doing anything more in line with the commission plan, said a spokesman.

Neither of the UK’s dairy producer organisations (DPOs) will be looking to use the commission’s voluntary supply restraint route.

These are DCD DPO, which has 360 members supplying milk into Dairy Crest’s  North Cornwall Davidstow creamery and about 660 members of Direct Milk DPO, supplying Muller with milk on standard liquid, liquid formula, organic and some retailer-aligned contracts.