Milk prices still failing to reflect costs

By andrew arbuckle
Published on 15/12/2012 00:38

Despite high-profile campaigns earlier this year, milk producers are still not receiving prices that cover their costs of production and there needs to be an immediate increase in the money they get for their milk.

That was the blunt conclusion of the Dairy Coalition – consisting of NFU Scotland, the NFU, NFU Cymru, Farmers For Action, Tenant Farmers Association, Women’s Food and Farming Union and the Royal Association of British Dairy Farmers which met this week.

The group is also seeking the rapid delivery of improved contracts for farmers, in line with the recently agreed voluntary industry code. It called on all processors to accept the terms of the “Dairy Industry Code of best Practice on Contractual Relations” and implement them without delay.

The latest cost of production figures show a break-even of 32p per litre while the coalition claim some milk prices being achieved on farm are as low as 25p, with typical liquid prices ranging between 29p and 31p.

The other factor now coming into the equation are estimates that suggest year-on-year milk production looks as if it will be down by 7.3 per cent this year as a result of various pressures, including the difficult weather conditions of the past six months.

Gary Mitchell, the NFUS dairy board chairman, said “It’s no wonder farmers are frustrated. Costs on-farm are increasing daily, milk prices are stubbornly refusing to keep up and, as a consequence, production is falling back.”

He said producers needed confidence to go into the future and that required a sustainable milk price that recognised the realities of modern production.

NFU dairy board chairman Mansel Raymond: said“Delivery of the code was a key success following the efforts of dairy farmers and the coalition during the summer of 2012. However, farmers now expect action as a result of this agreement.”