NFU Scotland has slammed indications that Robert Wiseman Dairies will cut its milk price as soon as it can in the New Year.
Wiseman has just published interim financial figures which show the company’s pre-tax profits slipped more than 20% to £12.1m in the six months to October.
Turnover for the half hit £281m from 687m litres of milk, including an extra 7m litres in the highly competitive middle ground.
The launch in Tesco of an extended shelf life milk called Pure has also been a success.
In a statement to the stock exchange, Wiseman blamed falling profits on the high cost of HDPE plastic resin and fuel for distribution.
Chairman Alan Wiseman said: “Our target is to re-build margins in the period ahead, but higher costs clearly make this more difficult.”
Further down the announcement was the following comment on milk prices: “The current level of premium cannot be maintained and we will be seeking to narrow the gap in early 2006.”
But NFUS milk committee chairman Willie Lamont has argued that Wiseman should be putting pressure to improve returns on the retailers not farmers.
“Wiseman says it is paying a significant premium over Arla and Dairy Crest, but a bad price is a bad price.
“With a Wiseman farm gate price of 19.6p per litre, against a cost of production at 19p, that means a net income of £6,000 for the average farm to support the family and reinvest in the business; and they are the lucky ones.”