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NFU Scotland Disappointed as Arla Next to Drop Milk Prices

27 December 2017

SCOTLAND, UK - NFU Scotland’s fears that the huge milk price cut from dairy giant Muller would see others to follow suit have been realised with the announcement that European co-op Arla is to cut its price in January.

The net 1.3p per litre cut for Arla suppliers would have been more had it not been for a beneficial movement in the currency exchange rate and benefits brought by Arla’s own bonus scheme for producers. The Arla cut compares with the 1.5p cut announced by Muller. Farmer-owned First Milk is holding its price for January.

NFU Scotland Vice President Gary Mitchell, a dairy farmer in Stranraer, said that the announcement from Arla was disappointing and the milk price benefits that both currency exchange and the new ArlaGaarden farm assurance initiative should have been bringing to our price have been eradicated in one fell swoop.

Mr Mitchell said: "It is disappointing that the farmers involved in the ArlaGaarden scheme have had to adhere so stringently to the qualifying criteria only for one price drop to leave many of its benefits lost.

"Like our colleagues at NFU, we are deeply disappointed at the clamour from some commentators to talk down the dairy market, encouraging price volatility at a time when stability and balance must be sought.

"At our recent Milk Committee, a presentation from AHDB Dairy gave a more realistic and rational perspective on the current marketplace for dairy which did not support the irresponsible tack that some commentators have been taking that risks dragging us from one price crash to another.

"It is crucial that we make our UK Dairy Industry sustainable for the long term especially as we get nearer Brexit.

"There is a real need for a transparent supply chain that can accommodate a margin for producer, processor and retailer and, with markets softening, we need clear signals from our processors and co-ops that all efforts are being made to ensure milk prices reflect true markets rather than those of fantasy ‘futures’ markets."

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