Farmers urge probe into 'deep-rooted issues' affecting milk market

Increased price pressures are putting the long term prosperity of the sector at risk
Increased price pressures are putting the long term prosperity of the sector at risk

Scottish farmers have written to a parliamentary committee urging an investigation into the 'deep-rooted issues' affecting the current milk market.

It follows the recent decision by processor Muller to serve a 12-month notice period on 14 producers in Aberdeenshire after a review of its operations in Scotland.

The dairy firm said the fresh milk surplus in Scotland is 'substantially in excess of local demand' from consumers.

Dairy farming in the region has already undergone a huge degree of restructuring.

NFU Scotland points out that in 2009, there were 51 dairy herds in the Aberdeenshire area.

But in the space of 10 years, this figure has halved, with no large-scale milk processing in the region.

Dairy farmers recently met with the union and minister for rural affairs Mairi Gougeon MSP to discuss these concerns.

Those involved in the meeting included Muller suppliers on aligned supermarket contracts, those who are non-aligned and additional input from the Muller Farmer Board.

NFU Scotland’s Milk Policy Manager Stuart Martin, who attended the meeting, said: “Despite the sense of frustration and injustice in the room, the meeting was focused on solutions as the farmers strive to find a new and viable home for their milk in the coming 12 months.

“Faced with an uncertain time, it is important that a new milk buyer is found soon to justify investment levels in these businesses and providing suitable incentive and reassurance for their valued staff, who fear the writing is on the wall.”

Mr Martin said there is currently a 'massive disconnect' that currently exists in the dairy supply chain.

“One of the farmers in attendance reporting that he is getting 0.5 pence per litre less for his milk now than he was 25 years ago, when he first started milking cows,” he added.

NFU Scotland, along with other UK farming unions, have written to Westminster’s rural affairs committee demanding a short-life investigation into fresh milk.

“We hope that this will be a committee priority post-election,” Mr Martin said.

“From a wider rural economy perspective, we also highlighted that a number of local private companies who supply into the local dairy sector are concerned about their viability post-November 2020.

“That is why it is important for all stakeholders to ensure that dairy farming in the region has a future and NFUS will support affected dairy farmers in the challenging days and weeks ahead.”

It follows the recent release of figures which show that dairy farmers' earnings dropped sharply in 2018/19 and are only set to recover marginally in the coming year.

The Milk Cost of Production Survey 2019 revealed that comparable farm profits fell from 5.9p/litre (£383/cow) to 2.69p/litre (£141/cow) in the year to 31 March 2019.