An increase in the price of milk proposed by Arla, one of the major buyers in the UK, has been both welcomed and criticised by NFU Scotland’s milk guru, George Jamieson.
“The Arla price rise is welcome, if disappointing in scale,” he commented after seeing the Arla plan to pay another 1p per litre to producers from 1 September.
He called on the international company to do more for primary producers. “The challenge for processors is what efforts are they making to persuade retailers end users to lift prices? Dairy products have been sold forward cheaply, but producers cannot continue to produce at prices still way below the cost of production.”
Jamieson included dairy farmers in his call for a more substantial increase in the value of their milk: “For their part, farmers and their representatives must continue to challenge their milk buyer on how prices are set and why prices are not rising more quickly when markets are moving and the need is desperate.”
He believed the time was right to take this proactive stance, saying it was now very clear that the market had moved fundamentally with global, European and UK commodity markets all positive. “Signals are all pointing to higher prices. Consumer product prices will quickly follow commodity prices and that means prices must rise quickly.
“Production is falling fast and the EU reduction offer, due to be finalised in the next few days, will be very tempting if processors do not raise prices to a level that will encourage producers to produce.”