NFU dairy Board asks 'Where's the Money?'

The NFU’s national dairy board has issued a strong message to dairy farmers that they should be challenging their buyers and representatives for price increases.

British commodity markets have been rising for many months now.The latest figures from DairyCo reveal that bulk cream prices have been rising since February from£750/tonne to£1,350/tonne in September. To a liquid processor this represents an increased income of 3.40ppl, from 4.25ppl in February to 7.65ppl in September.Yet, the annual average price for the majority of liquid contracts has remained unchanged since May.

NFU dairy board chairman Gwyn Jones said:"With retail prices unchanged since last year, markets rising and farmgate prices down the question on everybody’s lips is where’s the money?

"Any farmer supplying a liquid processor should be demanding a price increase. Wiseman’s was the only liquid processor to increase it’s price in August by 0.3ppl on the back of increased cream returns–so Wiseman suppliers should legitimately be expecting more, but farmers supplying Dairy Crest and Arla have received nothing, and should be challenging their representatives to find out why their price hasn’t increased yet; demanding that it does so immediately.

"No doubt these buyers have been holding out to see what Tesco would do, but with the price review only resulting in a slight drop, Tesco’s liquid price is still at the top of the league table, leaving these processors nowhere to hide.

"Farmers supplying milk for cheese have had a grueling year. But markets are tightening and prices should now be moving up.

Production in the Republic of Ireland has dropped so steeply that there are even concerns about cheese shortages later in the year. Couple that with the increase in the Northern Ireland auction price, up 11 per cent in September, and it means that there will be less cheap cheese available for import. The real solution of course is to reduce our vulnerability to cheap imports by addressing our lack of competiveness. We can produce cheap cheddar but not before having a major overhaul of our manufacturing strategy.

"British cheese supplies are down by six per cent this year, although some varieties have been worse hit. The consequence is that consumers wanting to buy British cheese this Christmas might be disappointed at the selection on offer."

North West dairy board chairman, Mike Taylor commented on the situation in the NW region, which was severely affected by the collapse of Dairy Farmers of Britain:"There are too many dairy farmers in the North of England that are tied into market realisation contracts, returning anything between 14–19ppl, but which are not reflecting the true market value of milk.The fact that milk is being sold at such shockingly low prices, means that some buyers are being undermined and farmers are taking the pain.If we are to stand any chance of moving prices up then anyfarmer on a realisation contract should be allowed to move around for a better price the minute it becomes available."

Gwyn Jonesadded:"The pressure is really on for farmer representatives to ensure that milk buyers are increasing prices in line with the market. Farmers need to be demanding that their representatives deliver."