Campaigners slam retailers in fight for dairy industry

By Rod Addy contact

- Last updated on GMT

Falling global demand and over-supply is putting severe downward pressure on milk prices
Falling global demand and over-supply is putting severe downward pressure on milk prices

Related tags: Milk prices, Milk, Dairy farmers

Farmers For Action (FFA) has lashed out at retailers for not allowing price increases as dairy farmers face plummeting milk prices and is pressing for government and European Commission (EC) support.

The group cited recent action by processors to cut UK milk prices in an effort to compete with low prices on the global market and meet customer requirements.

It stated on its website: “We are getting hints from processors that these cuts are being instigated by their retail customers. This is unacceptable when if you go into any store you will see the prices of butter, cheese, liquid milk are still where they were three months ago. Profiteering or not?

‘Severe price cuts’

“If we as dairy farmers do not stand up and do something to stop this decrease continuing, we cannot see how British dairying can progress forward. People will say you cannot buck global milk prices. We remind everyone over 80% of milk produced in this country is used domestically. Therefore we should not be subject to these severe price cuts.”

FFA questioned the EC’s August 28 offer to provide storage for butter, skimmed milk powder and some cheeses for three to seven months, arguing stockpiling would only lead to further price reductions.

The organisation has launched an e-petition urging that the government buys up current stock levels and uses Common Agricultural Policy cash to distribute that to the needy.

Extend storage measures

Meantime, the National Farmers Union announced this morning (September 3) that it was pressing the EC to extend storage measures to at least a year and include all cheeses. It is also urging the Commission to release product back on to the market in a way that minimises trade disruption and increase promotion of EU dairy exports.

In the past week, Müller Wiseman announced a reduction of 1.8p a litre to 29p a litre. Dairy Crest announced a 1.75p a litre drop, taking prices down to as little as 28.34p a litre for standard liquid milk contracts. First Milk also confirmed on Monday it would implement a 3p a litre reduction.

All cuts are set to take effect from October 1.

Falling global demand

First Milk chairman Sir Jim Paice MP blamed falling global demand for milk and Russia’s recent ban on EU dairy exports, further slashing demand, upping supply and increasing downward pressure on prices.

“Global and European markets have been falling since early spring, in some cases by almost 50%,”​ said Paice. “Despite us making a number of price reductions since June, market prices for our core products have declined further and faster than our price cuts.

“We are well aware of the impact that this price cut will have on our members’ cash flow, but this latest move means that we now have our milk prices in line with our projected market returns.”

Roddy Catto, chairman of the Müller Wiseman Milk Group, said: “Unfortunately, it is a reality that milk supply hasn't eased and markets are in free fall. As a board we will continue to work with the company to have constructive dialogue and understanding that neither the board nor the company like the volatility of the market we find ourselves in.”

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