Dairy Contracts and Markets Must Deliver

SCOTLAND - Dairy farmer frustration can only be addressed by immediate price rises and improved milk contracts according to the Dairy Coalition, who met last week.
calendar icon 17 December 2012
clock icon 2 minute read

The coalition – 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 - met this week and agreed its priorities were to ensure the delivery of a sustainable milk price.

It is also seeking the rapid delivery of improved contracts for farmers, in line with the recently agreed voluntary industry code. It called upon all processors and Dairy UK to accept the terms of the ‘Dairy Industry Code of best Practice on Contractual Relations’ and focus on delivering its full implementation without delay.

According to latest industry estimates, a break-even cost to produce milk is 32 pence per litre (ppl), yet milk prices achieved on farm are as low as 25ppl, and typical liquid prices are between 29ppl and 31ppl. DairyCo estimates suggest milk production will be down by 7.3 per cent this year as a result of the various pressures on-farm including the difficult weather conditions.

“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," said Gary Mitchell, NFUS Dairy Board Chairman.

“What farmers need now is confidence in the future; a sustainable milk price that recognises improving markets and costs and real improvements to contracts in line with the contracts code will certainly help with this.

“It may take time to amend contracts, but Dairy UK has been working with us on the code for over a year and processors have had the final approved text since October.”

TheCattleSite News Desk

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