Hundreds of dairy farmers have gone out of business in recent years, and following recent price cuts by milk processors, the industry says it has had enough.
The NFU and the Tenant Farmers Association have called for all price cuts since 1 April to be reversed by 1 August.
Robert Wiseman, Britain’s biggest fresh milk company that was taken over by European dairy giant Muller in January, cut the price of a litre of milk by 2 pence in June and plans to cut it again by 1.7p in August.
Wiseman’s standard litre price would then be 24.73p. This is well below the cost of producing a litre of milk, farmers say. Other milk processors in the UK announced price cuts last week.
In the dairy industry, the processors set the price they pay farmers for their milk.
They say they have had no choice but to pay less for the product, because the price of cream on the commodities market has fallen sharply in the past 12 to 18 months.
Milk processing in effect involves skimming off cream to make milk more palatable for consumers. So the processors say if they are making less money selling cream, they have less money to pay for the milk.
According to the NFU, Tesco and Sainsbury’s offer farmers “good” contracts, whereas those offered by Asda and Morrisons are “not so good”. Supermarkets will often buy milk directly from farmers and also through third-party processors.
All the main supermarkets are selling milk at £0.52 per litre for 2.27 litres (4 pints) and £0.78 per litre for 1.13 litres (2 pints).
As usual, somewhere in the supply chain there are large profits being made at the expense of the UK dairy farmers. Will they only be happy when the dairy industry has been decimated and we’re only left with super dairies, or resulting in imported milk from Europe.