Stand together – NFU dairy chairman tells industry summit

The NFU has called on all sections of the dairy industry to work together to add value and avoid the potentially disastrous loss of critical mass.

Speaking at the Dairy Supply Chain Forum today in London, in the wake of further deep cuts in producer milk prices, NFU dairy board chairman, Gwyn Jones, put forward a six point action plan.

He said: "There are no easy solutions for this industry but it is wrong to suggest nothing can be done and that market forces will solve our problems. That is why we have suggested these six recommendations which need to be developed and taken on by the industry."

The action points are:

1. For the industry's customers to move away from regular and damaging tendering exercises that take millions of pounds of value out of the industry and seek long-term engagement with milk processors and the farmers who supply them

2. The entire milk supply chain needs to recognise the importance of working together to add rather than subtract value at every stage

3. Customers should be encouraged to put British first. The industry needs to be competitive, but it is wrong that farmers are forced to comply with strict farm assurance standards only for retailers and food service companies to import dairy products produced to inferior standards, particularly for the production of cheese, butter and other long life dairy products

4. The issue of raw milk supply contracts needs to be addressed urgently so that processors cannot use producers' money to buy shelf space with the impunity that they do at present.

5. The need for further rationalisation of the manufacturing sector is more evident than ever in order to promote much greater competitiveness through the dairy supply chain.

6. Farmers need to take greater control of their own destiny in the industry by driving that rationalisation process forward through farmer controlled businesses

Mr Jones said: "The situation is becoming ever more critical. In the last two days we have seen two more major milk processors – Dairy Crest and Wiseman – cut the price of milk. This cannot continue.

"There is no future for a dairy industry which continues to squeeze producers. Dairy farmers will vote with their feet and milk production will drop leading to inefficient processing plants and job losses. The whole sector needs to stand together to add value to the milk supply chain instead of allowing it to be leached away."