DAIRY FARMERS could face more tit-for-tat price reductions by milk processors as Robert Wiseman Dairies follows Arla Foods UK’s lead with a 0.25p/litre cut for July milk.
Arla attracted widespread criticism and direct action by Farmers for Action after announcing a June price cut of 0.35p/litre in the same week as record pre-tax profits.
Wiseman’s director of procurement Pete Nicholson said: “We cannot compete in a market where one of our major competitors is buying milk for 1p/litre less than we are paying.”
The firm has also strongly hinted that the July cut is unlikely to be sufficient to bring it back in line with Arla.
Mr Nicholson said: “We see our position as, firstly, needing to move prices to correct the pre-June differential and, secondly, addressing the June price decreases if no reversal of that position is achieved.”
Wiseman’s suppliers will also see their July milk cheques pinched by further changes in seasonality payments.
Lower-than-expected milk volumes mean the premium for maintaining a level profile will be cut from 1.2p/litre to 0.3p/litre, while penalties will be increased by 0.2p/litre.
David Handley of Farmers for Action said he understood that the price gap was not sustainable, but Wiseman was wrong to cut its prices.
“They should be standing firm while we push the others up.” Direct action against the firm and its customers was likely, he added.
On a more positive note, Dairy Crest confirmed it will pay more for milk for cheese bought under its own contracts and through co-op First Milk this month. Details will be released soon.