NFU Welcomes 'The Real Price of Milk'

US - The NFU has commended the co-operative First Milk after the publication of its report entitled The Real Price of Milk.
calendar icon 4 March 2008
clock icon 2 minute read
National Farmers Union

The report, prepared by Promar International, details the cost increases incurred by dairy farmers in recent months as a result of dramatic rises in input and labour costs and examines the impact that further developments are likely to have on dairy farm profitability over the next year. It argues that farmers should be paid the equivalent of 29.64 pence per litre for the milk. The majority currently receive between 25p and 26p per litre.


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"As this report shows, the substantial price increases seen by dairy farmers have barely scratched the surface in terms of long-term profitability."
NFU Dairy Board chairman Gwyn Jones

NFU Dairy Board chairman Gwyn Jones applauded First Milk for taking the initiative in publishing the report. He said: "It could not have been better timed with speculation building about milk prices going into the spring. In addition, many dairy farmers have yet to count the full cost of producing milk with fertiliser and feed prices having gone into orbit. This report shows authoritatively just what is going on and makes sobering reading.

"There is no denying that the industry is on a much better footing than it has been for a very long time but, as this report shows, the substantial price increases seen by dairy farmers have barely scratched the surface in terms of long-term profitability. Indeed, we would fully endorse the view that dairy farmers need not only to cover costs but make a decent return on capital in order to invest, especially with the looming cost of NVZs later this year. So it is self-evident that, if producer confidence is to be sustained, not only do milk prices need to be maintained at least at their current levels but, in all reality, they need to move upwards.

"For the liquid milk sector, most major retailers now have dedicated relationships with groups of producers which means they can take direct responsibility to ensure milk prices reflect the real cost of producing milk. The same cannot be said for other aspects of the dairy market which take up the lion's share of raw milk production and it is time to take forward the good work that has been done in liquid milk into other sectors."

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