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16/08/2006

Reduced milk supply is not the answer says MDC report



The NFU has endorsed a report by the Milk Development Council which explodes the theory that a massive cut in production would be the best way forward for Britain's dairy farmers.

The report 'Routes to Profitability' published today concludes in a commodity market the real answer to solving the UK's milk market woes lie in

· Greater collaboration to improve supply chain efficiency

· Increasing innovation

· Better contractual arrangements.

It states reducing commodity milk would be a 'very painful process' involving low milk prices and the loss of between 20-40 per cent of UK dairy farmers.

NFU chief dairy adviser Tom Hind said: "'We have become increasingly irritated by what can only be described as a 'dispersal sale' of the British dairy industry by a small number of commentators and dairy companies that advocate a significant reduction in raw milk supply.

"Little hard evidence has been submitted by those who advocate this approach to support the claim, and it has always seemed implausible that shrinking supply in a country that is not self-sufficient in milk or dairy products would have any long-term benefit. Hopefully this report will help to draw a line in the sand."

The NFU believes the UK dairy industry has fantastic market potential and competitive milk producers, the right ingredients for growing rather than shrinking the industry.




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