UK: A milk market place which ‘doesn’t work and isn’t fair’

FARMERS’ leaders have warned that the situation the dairy industry now finds itself in is “dire”.

In his speech to delegates at the dairy summit on Wednesday, Meurig Raymond, deputy president of the National Farmers’ Union, said farmers and dairymen had been ‘pushed to the brink’ by price cuts.

“Never before have I seen before such an outpouring of horror and anger from farmers. Nor have I ever seen such a show of unity and determination to right the wrongs that have been inflicted on dairy farmers,” he said.

“In May and June this year the majority of dairy farmers saw their milk price cut by as much as 2 pence per litre, when the three major liquid dairy processors led price cuts.

“These cuts were cuts to the bone and beyond, they were farmers’ investment, depreciation and profit – gone.

“By almost any cost of production calculation these took farmers into loss-making territory.

“Today we are here because someone somewhere thought those cuts weren’t enough – someone thought, if they can take that, they can take some more. And so to the stunned astonishment of dairy farmers the length and breadth of the UK the announcements were made by Arla, Dairy Crest and Wiseman, that a further 1.65 to 2 pence per could be taken from farmers businesses –

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“Well we are here because it can’t.

“These latest cuts are the feed bill, the wages, the housekeeping – these cuts will take us massively into loss making territory with many farmers losing up to 6p a litre.”

He called on Farming Minister Jim Paice to help the industry, and added that the market place “doesn’t work and isn’t fair”

“Back in 2010, the retail sector went to war – it started with discount retailers promoting milk to get recession hit shoppers through the door.

“Next we saw the major multiples take on the discount retailers, in an attempt to entice back lost customers.

“Unfortunately, our liquid milk processors were all too eager to facilitate this spat, by competing with each other to sell cheaper and cheaper milk to these supposedly important customers and what did they do? They gave away the farmer’s margin.

He added: “Our own survey of 1000 consumers shows that only 22% know the price of milk. Three quarters think it is higher than it is. And, even then, 62% say they would willingly pay 5p a pint more if that ensured farmers get a fair price.”

Some retailers give a fair price for liquid milk which is guaranteed to meet the costs of production and these include Sainsburys, Tesco, M&S and Waitrose, he pointed out.

“Retailers said they support UK dairy farmers. Well, if that’s the case, let’s see the evidence. It’s time to step up to the mark and show it. Stop buying milk from processors who pay less than the cost of production to British dairy farmers,” he said.