NFU urges retailers over falling milk prices

With mounting concern over the falling milk price on global markets, NFU dairy board chairman Rob Harrison has issued a call to retailers both in the UK and the EU to work together to safeguard the future of British dairy farming.

“As NFU dairy board chairman, I am meeting with all aspects of the dairy supply chain to ensure all that can be done is being done and that no-one is using the current downward price trend as a convenient excuse to make additional cuts to the farmgate price,” said Mr Harrison.

“Only last week Iceland joined other retailers who are using milk as a loss leader. While consumers are getting a good deal in their shopping basket and are being encouraged to buy and use more milk, to all retailers I say this: You must promise to ensure you fund those deals from your own profit margins and not take it from the pocket of farmers – not now and not ever. It’s vital those retailers put transparent pricing mechanisms in place and ensure suppliers are compliant with the Voluntary Code.

“Some retailers – including Iceland - have made assurances that farmers are not paying for this discount but we need that promise from them all. I also have a longer-term concern, which is shared by dairy farmers up and down the country.

"Put simply, milk being sold this cheaply devalues the product in the eyes of consumers. This could have long-term negative ramifications for the sector as a whole. We know milk is a staple in the diet of men, women and children across the UK and it is extremely worrying to every dairy farmer to see it being used as a battleground between retailers.

“The current global situation has led to a crisis for many British dairy farmers. Many are selling milk at well below the cost of production and while some retailers have made great strides forward to create clear and fair formulas in how they pay their dairy farmers, we are concerned that the long term impact of extremely low retail milk prices on the industry could be very serious for all concerned.

“Everyone needs to play their part to ensure British dairy farmers weather this global price storm. I will continue to meet with policy-makers both here and in the EU to look at what market interventions are possible and continue the work we have in place on the voluntary code which helps to ensure fairness and transparency in the supply chain between processors and their suppliers.”

Ministers to meet dairy representatives after milk price crash

Environment Secretary Liz Truss has said she will meet with members from the dairy industry this week after recent milk price falls have caused a number of protests in the past month.

"Further protests are planned for the coming week, members and press will be notified," Farmers for Action said after over 500 people attended the protest on Wednesday night in Cornwall against cuts in milk prices.

The announcement comes as the Royal Association of British Dairy Farmers said it entered talks with leading MPs to express their own concerns.

This week the Association will meet with Dairy APPG chairman and Neil Parish MP (who called a joint industry round table discussion with other MPs).

“RABDF fully understands that the current fall in farm gate milk prices reflects the global trend and shares the plight of all those involved throughout the chain. Farmgate prices have fallen by up to 30% in the last three months and there are threats of further cuts,” said RABDF chairman, Ian Macalpine.

“Dairy farmers have accepted that there will be price volatility in future, and while these current trends are extreme, we have to find a way forward to enable dairy farmers to maintain a sustainable business.

“RABDF together with DairyUK has developed the newly launched Dairy APPG which is giving us a direct route to informing MPs about the current crisis and the opportunity to consider options which will provide a solution.”

Support for dairy farmers from the public, processors and retailers is vital after farmgate milk prices have fallen by around 25% in recent months.

Speaking today at the Welsh Dairy Show, Jones, a dairy farmer from Caernarfon, said that the current situation was causing significant financial strain and called on the rest of the supply chain to take action to support milk producers at this time.

NFU Milk Board Chairman Aled Jones said, “Processors and retailers need to do more to deliver a sustainable milk price back to Welsh dairy farmers. There are a number of pricing models in the liquid milk sector that do this but with the majority of milk in Wales processed into cheese we urgently need to see these models expanded into milk that is destined for the domestic cheese market.

The Landworkers’ Alliance (LWA) said it unequivocally supports the recent round of dairy blockades launched by Farmers For Action (FFA). The LWA membership includes a number of small-scale dairy producers who, although not directly supplying to supermarkets, have been indirectly affected by recent price cuts driven by pressure from the multiple retailers.

LWA’s dairy farmers are forced to compete on price with larger-scale producers in an effort to remain competitive at the farm gate. The 3p per litre price cut since June has hit smaller farmers who are unable to achieve the economies of scale that have helped to buffer the impact on larger producers.

“The UK has lost half of all its dairy farms since 2000 thanks to neo-liberal policies that benefit processors and supermarkets. We need a new Milk Marketing Board, or something like it, to stabilize milk prices at a level that gives dairy farmers a decent living.” Says Simon Fairlie, an LWA member who runs a micro-dairy in Dorset, “I support direct action. The original Milk Marketing Board was formed in 1933 after mass demonstrations by dairy farmers and that is the only way we will ever get justice today.”

The LWA is an official member of the international peasant farming movement La Via Campesina which represents 200 million small-scale producers around the world. We campaign for the rights of small-scale producers and lobby the UK government and European parliament for policies that support the infrastructure and markets central to our livelihoods.

Speaking ahead of the South West Dairy Event, NFU dairy board chairman Rob Harrison said: “Dairy farmers will be anxiously watching global markets for signs of an upturn and when it happens it is important that farm gate milk prices respond quickly and positively.

“It is more important now than ever before that food businesses and retailers pull their weight when it comes to delivering a sustainable price for dairy farmers and back British farming. Some, but by no means all, retailers have determinable milk pricing mechanisms. We’d like to see more retailers take the lead of the likes of Tesco, Sainsbury’s, M&S and Waitrose, whose pricing mechanisms give farmers some certainty over price. There are a number of opportunities for business in the supply chain to do more in liquid, cheese and other contracts.

“While more can be done proactively, it’s also important to remind retailers now is not the time to take advantage by applying pressure for price cuts as any volatility in the market could put a huge strain on the whole supply chain which would make the situation even worse.”

But Mr Harrison said the long term outlook for dairy farmers was still very positive.

“The UK dairy industry is operating competitively in a growing global market – the future remains bright, but we need to work together to ensure the foundation of the industry, our farmers, have a future.”