Guarded welcome for Müller’s milk price rise

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There was a guarded welcome yesterday from NFU Scotland to the announcement that dairy farmers who supply Müller Dairy and Robert Wiseman Dairies will see their milk price rise to 30.5p per litre by 1 February 2013.

The company announcement said there would be a 0.5p per litre increase on 1 December from the current level of 29p per litre with another 1p per litre coming in at the beginning of February next year.

Ronald Kers, chief executive of Müller UK & Ireland Group, said: “We want to return a higher milk price to farmers so that we can ensure security of supply for our customers in an environment where off farm milk production is dropping.”

After praisng his company’s Partnerhip Board for their work in putting together the deal, Kers lambasted those farmers who had picketed the company distribution depots protesting against price cuts.

“We are determined to be the leading dairy company in the UK and Ireland and the preferred home for milk produced by Britain’s dairy farmers and we will work closely with the farmer board to this end.

“For this reason we cannot be distracted by localised and unlawful militancy promoted by people many of whom have no connection with the group whatsoever.”

Roddy Catto, chairman of the Muller Wiseman Milk Partnership Board, echoed this latter sentiment. “We would ask those behind recent militant activity to respect the fact that we are the elected representatives of all dairy farmers who supply the group, “ he said.

“Blockades of the kind recently seen in Shropshire risked undermining the progress of these discussions and it is time now to build a relationship that is based not on disruption and ultimatums but on constructive dialogue.”

While admitting the company had raised the bar on milk price and that historically it might be considered a good price, NFU Scotland’s milk policy manager George Jamieson said that with costs above 30p per litre the price rise had to be taken in context.

“The major concern for any dairy farmer right now is facing up to a winter with generally poor forage, exceptionally high inputs and a milk price which, for many, will not cover these costs.

“Milk production on farms continues to plummet. They are down 6 per cent on last year and volume is unlikely to lift before the spring.”

Jamieson added that, with prices rising for milk-based products, the market should be returning at least 30.5p per litre at the farmgate. “Cream, often used as a driver to bring prices down, is now more than £1,500 per tonne and likely to rise in the run in to Christmas,” he said.

He then thrw down the gauntlet to all milk buyers saying they must react to the present crisis: “Given the challenges of the winter, there is a danger that many dairy farmers will cull more cows and some will come out of milk unless prices rise.

“This is a real risk and one that milk purchasers must factor in if they are serious about long-term supply. If the UK processing and retail sectors want to protect their milk supplies, then there is a case for the milk price to be ahead of the market even for a limited time.”