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29 September 2016 | Online since 2003
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21 September 2016 08:16:00 |Dairy,Finance,News

Milk processors 'dragging their feet' on price as farmers continue to receive low returns


The market outlook is now much improved and with significant positive moves in recent weeks

The market outlook is now much improved and with significant positive moves in recent weeks

Most dairy farmers continue to receive returns 'well below the cost of production' and milk processors are dragging their feet, according to NFU Cymru.
The market outlook is now much improved and with significant positive moves in recent weeks.
NFU Cymru Milk Board said they were very forthright in its view that much more money should now be coming back to farmers and that processors are clearly ‘dragging their feet’ in this respect.
"The gap between most producer prices and commodity prices is now quite significant," said NFU Cymru Milk Board chairman Aled Jones.
"All the price indicators point towards a milk price of 25ppl if not more, yet the reality for most farmers is that milk prices are still around 20ppl.
"Global prices are continually moving upwards and the last GDT auction saw the third consecutive increase.
"The AMPE and MCVE price indicators have moved dramatically upwards and are now 26ppl and 28ppl respectively for August 2016. Yet the farm-gate price remains around 20ppl."
'Processors need to reflect on the pressures that milk producers are under'
Mr Jones said it all pointed to the conclusion that processors are very slow to respond to market improvements.
When the market takes a downturn, farm-gate prices respond immediately and processors reduce their price overnight.
"We need to see a similar reaction when the market turns upwards and farming businesses need to see the benefit in their farm-gate prices.
"Processors need to genuinely reflect on the pressures that milk producers are under.
"We hear platitudes that processors and end users have sympathy for producers’ plight and much of this will be genuine, but the speed in reflecting positive market increase in value is simply not quick enough, particularly in the current exceptional circumstances.
"Actions speak much louder than words and we simply ask of the supply chain to seriously and genuinely consider the long term damage and consequences of not delivering much more back to primary producers.
"We expect farmers to see a fair share of any improvements in markets returned to their own balance sheets and not held back higher up the supply chain."
"We expect farmers to see a fair share of any improvements in markets returned to their own balance sheets"

"We expect farmers to see a fair share of any improvements in markets returned to their own balance sheets"


NI strike
Farmers for Action said a Northern Ireland milk strike is now a 'strong possibility.'
The group said they will be holding a crisis meeting towards the end of November which could enable a strike to be given the go-ahead around the Christmas period.
"All Northern Ireland dairy farmers will be welcome and a vote will be taken after the debate to have a milk strike unless corporate food retailers, corporate food wholesalers and co-op milk processors put their contempt for NI dairy farmers behind them," said William Taylor from the group.
"Northern Ireland’s dairy farmers now have nothing to lose by striking as milk is in short supply, the EU reduction support is available and not forgetting that milk is worth approximately 10p/l as fertiliser.
"At long last this puts NI farmers in the driving seat where they now have the power to deliver fairness at the farm gate."

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