NFU Cymru has warned of the precarious financial situation of liquid milk processing and the severe impact this is having on primary producers and the wider supply chain.
Increased price pressures are putting the long term prosperity of the sector at severe risk, the union says.
The farmgate milk price paid by most major processors in the liquid milk sector is currently in the region of 24/25p per litre.
This is a price putting pressure on many farmers who have struggled to recover from the 2016 downturn which saw farmgate prices drop below 20ppl.
It comes just weeks after north Wales processor Tomlinson’s Dairies Limited entered administration, affecting over 70 dairy farmers, many of whom are from Wales.
Meanwhile, a number of discounters and major retailers continue to sell milk at low prices.
NFU Cymru highlights that just last week, retailers are offering two litres of semi-skimmed or whole milk for £1, with some wholesalers reducing the price even further below £1.
Such is the level of anxiety across the sector that farming organisations across the UK have written to the EFRA committee to conduct an urgent investigation into the liquid milk market.
Speaking at the Welsh Dairy Show today (29 October), NFU Cymru Milk Board Chairman Gareth Richards will call for greater fairness and transparency across the supply chain.
“We have a situation where primary producers – the ones taking the risk on milk price – are feeling the pain of a softening of prices further up the supply chain, often without consultation.
“The sad reality is that the UK dairy liquid milk market is no longer functioning properly. That’s why we are now calling for all businesses within the supply chain, including retailers, discounters, food catering businesses and food manufacturers to work with primary producers and processors in a robust, trusting relationship that helps to deliver sustainable returns for all involved.
“We know that around 98% of UK households regularly consume dairy products, so the demand is clearly there.
“We need to ensure that all of those involved in the production of these products, particularly liquid milk, receive a fair return for their work,” Mr Richards will say.
