The UK dairy industry will need support of Government during 2015 if it is to overcome the effects of market volatility, Dairy UK Chairman Billy Keane said.
Difficult global market conditions are set to continue for several months before the situation gets better.
The challenges faced by the UK dairy industry in 2014 will continue into 2015 affecting both farmers and processors so it is imperative that we work together.
“The UK dairy industry has a strong long-term future to look forward to but to ensure it’s in a position to take full advantage of the opportunities that will arise, it will need all the help it can get from Government.
“At the top of the list of things we would like Government to focus on is to step up the support for British dairy products – recognising their nutritional qualities and encouraging consumers to buy our products.
“Our industry is a UK success story employing a large number of people across the supply chain. The capital investment by the leading dairy companies has more than doubled over the last decade from £105 million to £265 million. There has also been substantial investment on dairy farms.
“The latest Dairy UK Environmental Benchmarking Report showed that dairy processors have achieved an 8% increase in energy efficiency since 2008, meaning they are on track to meet the Climate Change Agreements and Dairy Roadmap 2020 targets. We know that dairy farmers are also making significant strides forward in making in the environmental arena.
“Animal health and welfare is important to farmers, processors and consumers alike. Johne’s disease places a significant financial burden on the industry. The Action Group on Johne’s will strive to take the industry forward with the launch of a new management plan in the spring."
The NFU have also voiced their concerns about market volatility. Recently, the union's President Meurig Raymond said he felt 'desperate' for the 3,000 dairy farmers supplying Arla, who cut their price paid to farmers near Christmas.
"It couldn’t have come at a worse time and this latest reduction will continue to place huge pressure on cash flows for these farmers in the months ahead. It is vital that we don’t see this trend continue through other processors’ February price announcements.
“For the first time producer numbers have dipped under 10,000 with 60 going out of business in November alone. We will continue to put pressure on Government, retailers and the processors with the aim of trying to rebuild an economically sustainable dairy industry. We cannot emphasise enough how awful this downward spiral has been for the dairy industry in the UK.”
NFU dairy board chairman Rob Harrison said: “All we ask is that the public continues to buy British dairy products over the festive period, including British cheese, look out for the Red Tractor logo and continue to back British farming.”
First Milk Chairman Sir Jim Paice, said: “During meetings which we held across the country in November, we shared our view with members that this market was likely to get rougher before it gets better. Unfortunately prices for core dairy products have softened further since the start of December.
“The rest of the Board and I remain acutely aware of the difficulties that the extreme market volatility is causing our members and dairy farmers around the world.
“We do not know how long this current downturn will last, however our priority is to make the business and our manufacturing assets as secure as possible in order that we can continue to process and market every litre of members’ milk.”
