Dairy Farmers being squeezed!

During an NFU Cymru Milk Board meeting at Builth Wells this week, members were scathing in their remarks at continuing downward pressure on farm-gate milk prices and the failure of the supply chain to grasp the responsibility that it has to ensure that the signals given to milk producers, in terms of price, are right.

The latest comments of NFU Cymru's Milk Board are endorsed by the content of a report released this week by the Milk Development Council (MDC) into dairy industry margins, which provides a detailed and informative update on the state of the dairy industry.

NFU Cymru Milk Board Chairman, Mansel Raymond explained: "It is clear that the market is performing well and good returns are being made within the dairy chain on the back of increased liquid milk consumption, an increase in branded cheese sales, and a solid commodity base backed up by good international market fundamentals. In other words, what these figures within the MDC report highlight is, that we have a commodity that is strong enough to guarantee a fair return and profit to all those involved in the industry."

He continued: "However, in reality, this just isn't the case as the report indicates that retail margins have increased while farm-gate milk prices have been subjected to downward pressure.

It is increasingly apparent that commercial pressures have led to supply deals being struck at ever lower prices, putting the squeeze on those in the weakest bargaining position - dairy farmers."

"Rising costs on farm remain an issue and is one that the dairy chain must tackle as a whole. It is unreasonable to expect one link in the chain to absorb the whole impact of these increased overheads and these costs must be addressed by passing them up the supply chain to customers." added Mansel Raymond.

"This reinforces what NFU Cymru has been saying for a very long time, that the milk supply chain must acknowledge and grasp the responsibility it has to ensure that the signals it gives in terms of farm-gate prices are positive. The current volatile approach of the last couple of years has clearly dented the confidence of producers and if the supply chain allow this situation to continue, the steady exodus out of milk production will continue, which will exacerbate the situation and ultimately destabilise the industry." said Mansel Raymond.