Don't milk farmers dry
Better prospects for British dairy processors this year could trigger a fresh round of price cuts by retailers anxious to increase their margins, warned independent consultancy The Dairy Group. But further cuts to milk prices could be catastrophic for farmers.
With the combination of declining UK milk supply, firm world commodity prices and only a marginal reduction in support prices due in July, UK milk prices should be stable and even rising for farmers in 2007, it said.
"Any reduction in farm-gate prices when markets are firm would be catastrophic and could cause irreparable damage to the fragile confidence of the dairy industry," said Nick Holt-Martyn, director of The Dairy Group, which urged processors to resist retailer pressure.
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