Dairy industry needs to find ways of coping with market volatility

Pembrokeshire dairy farmers voiced their concerns regarding severe farmgate milk price cuts during a well-attended Pembrokeshire NFU Cymru on-farm meeting recently.

Speaking at the meeting, which was held at Little Hasguard Farm, Hasguard Cross courtesy of the Richards family, NFU Cymru Milk Board Chairman, Aled Jones said, “There’s no doubt that we as dairy farmers are likely to have to contend with the rollercoaster ride of increasingly volatile prices which are currently squeezing our margins hard. We will need to put plans in place to cope with increased volatility.”

“It’s more important than ever for dairy farmers to talk to their processors to see how we can better align any increases in our supply with their demand. Equally we need to see the processors investing in areas that can deliver added value to their businesses. We also need processors and retailers to ensure fairness across the whole of the supply chain and to establish dedicated supply pools and transparent pricing mechanisms that deliver fair and sustainable prices for the milk that we work so hard to produce. The Union is also looking at how futures markets could be utilised to dampen out some of this volatility.”

Mr Jones ended saying that the picture is not altogether bleak with continued growth in the global population and the demand for dairy products growing gradually, particularly within the growing economies of China and other parts of South-East Asia. He said, “There is still much for us to be positive about as dairy farmers as the long-term prospects are good, however it won’t be an easy ride and we will need to get through this difficult period before we see a brighter future for our industry.”

Pembrokeshire NFU Cymru County Milk Chairman, William Lawrence, said, “The current volatility that we’re experiencing impacts on our confidence to invest in our businesses. We need to see market mechanisms put in place that will take some of the risk out of the volatile prices that we’re now seeing. These will be vital to assist new entrants to the dairy industry and those who are investing in the future.”