Dairy farmers in Scotland 'still being short-changed' despite price increases

Retailer domination and liquid milk market continues to "starve" the dairy industry, the union said
Retailer domination and liquid milk market continues to "starve" the dairy industry, the union said

Despite some milk prices now stretching to more than 30p per litre (ppl), NFU Scotland states that Scotland’s dairy farmers are still being short-changed.

At a meeting of NFU Scotland’s Milk Committee, held in Edinburgh on Wedneday (4 October), farmers from around Scotland expressed anger and frustration with the dairy supply chain.

After two years of unprecedented price pressure, some farmers felt milk buyers and retailers continue to undervalue dairy farmers and raw milk, with slow price rises at the farmgate failing to match the surge seen in market prices.

NFU Scotland committee members have called for milk buyers to build trust; develop better contracts and pricing models and work to restore confidence before more dairy farmers give up.

Milk buyer Muller has taken its headline figure for November to 30.5ppl and First Milk in Scotland are to pay 28.59ppl in October.

Arla is paying just over 31ppl, Lactalis 28.5ppl and Grahams 29.75ppl, according to listed prices.

However, spot prices for milk now stand at 40ppl or more and the current strength in dairy markets, combined with market indicators are not being reflected in the prices dairy farmers are currently being offered.

'Starve our industry'

NFU Scotland Vice President Gary Mitchell, a dairy farmer near Stranraer, said retailer domination and liquid milk market continues to "starve" the dairy industry.

He said: “Back in 2016, when prices fell to their lowest point for a generation, all dairy farmers would have been ecstatic with a milk price that started with a ‘3’.

“However, retailer domination and the liquid milk market continues to starve our industry of much needed cash, and that is hugely frustrating. With a difficult summer to graze cows, make forage and harvest grain, winter milk production will not come cheap so scaremongering about over-production is the least of anyone’s worries.

“We need to see prices from the processors and retailers that are a true reflection of where the market is for milk and dairy products to try and build some confidence for our dairy farmers, who continue to be let down by their buyers.”

Following a prolonged spell of low milk prices, incomes are set to increase markedly in 2017/18 amid soaring dairy demands and values.

Dairy farmers lost an average of 3.49p per litre in 2016/17, following a spell of disastrously low milk prices, according to a new survey.