Farming leaders have held crunch talks with Dairy Farmers of Britain’s receivers to find a way to give the co-op’s remaining suppliers a “dignified exit” from the industry.
Representatives from DEFRA, the NFU and other industry organisations met the dairy’s manager on Wednesday (17 June) to discuss options to help the 300 farmers still providing milk to the troubled dairy.
Receiver and manager Stephen Oldfield, of PriceWaterhouse Coopers, revealed last week (12 June) that farmers supplying the dairy on monthly rolling contracts were being offered a minimum of 10p/litre, a sum he admitted was “uneconomical”.
“There are only two alternatives – give the remaining 200 suppliers a dignified exit from the industry, or help to ensure the considerable costs in haulage don’t mean they have an uneconomical milk price at the farmgate,” he said.
“I know some of the remaining suppliers are young and are much-needed new blood in the industry.
“It would be a shame to see them come out of dairying when they are just starting to engage.”
Mr Oldfield said “pockets” of DFoB suppliers remained in the north east, North Yorkshire, Cumbria, Lancashire, South Wales and an area around Stoke.
While those suppliers had struggled to find new milk buyers, he said it was vital they kept a clear head and reacted calmly to the circumstances.
“I have already said people shouldn’t jump, but they should recognise there’s significant financial difficultly out there caused by DFoB going into receivership,” he added.
Mr Oldfield denied rumours letters had been sent to suppliers reminding them of the 5p/litre loan guarantee that producers could be liable for, insisting he wanted to be “honest and straight-forward” with farmers.
No deadline would be placed on how long he would continue to collect milk from the remaining suppliers, but said he could only pass down a milk price which took into account collection costs.
“Essentially the issue is the price I’m able to return is uneconomical to those producers.
“Unless something is done to help them, they are unlikely to be able to continue in dairying.”
Milk being supplied to the dairy was being sold on the commodity market or other milk brokers, he added.
“I have very few direct customers left – 60% of them left after we went into receivership. I now have to rely on the commodity markets to remove the remaining milk.
“I have no idea what can be done to help these suppliers, but I’m going to ensure what can be done is done.”