A farming union has said they have welcomed price increases by milk processors, stating that it is a strong inference that milk prices are moving forward.
This week First Milk and Muller announced increases to their milk prices, following earlier moves by Arla and Grahams The Family Dairy and indeed the 12-month minimum price commitment by Lactalis.
NFU Scotland believes that as commodity prices remain strong, further moves like these are essential, particularly the dramatic price levels for butter and cream, but also a strong cheese market.
The objective market indicators, AMPE and MCVE, which track dairy commodity values have continued to rise, now approaching the heady heights of 2013.
Both indicators have now risen to 36/37 ppl approaching 60 per cent on the year, whilst milk prices have risen to around 27ppl rising by around 30 per cent.
George Jamieson, NFU Scotland Milk Policy Manager, commented: “AHDB’s future milk price equivalent based on futures indicators suggests a strong market going forward into the winter months, and we strongly encourage milk buyers to acknowledge the market and the needs of their supplying farmer ‘partners’.
“Processors should pay as much as they can, rather than as much as they can get away with if they are to inspire loyalty.
“It cannot be stressed enough that the recent severe, extended period of very low prices has left serious and long-lasting damage to dairy farmers’ balance sheets and confidence, which has, and will impact on future investment on farm, with long-term consequences on the competitiveness of the Scottish dairy sector.
Scotland lost another 33 dairy farms according to a recent report, with more losses likely.
