Summer of unrest for dairy farmers

There has been a voluntary agreement signed and demonstrations in the days since the UK processing industry announced price cuts and the National Farmers Union called for an emergency summit in London. The union had backed plans to demonstrate  outside processors and retailers involved in the latest round of cuts at the meeting.
Around 2,500 dairy farmers from England, Scotland, Wales and Northern Ireland packed out Central Hall Westminster, protesting price cuts which NFU deputy president Meurig Raymond described as,  “Not only being cuts to the bone, but putting farmers into a loss-making situation.”
The deadline of 1 August was set, as that was when the additional drop in price paid per litre was set to start.
Raymond was very plain in his aims, which have since happened. “We will also mobilise the public with a concerted consumer campaign to help them understand the crisis facing the dairy industry and we will be asking them for their support with this campaign.
“All this co-ordinated action will be designed to put pressure and bring shame on the retailers and processors who have caused this crisis in the British dairy industry.”
Agriculture Minister Jim Paice also attended, despite some booing and heckling when he asked farmers whether they had done everything they could to reduce costs. Paice said at the time that the voluntary agreements would “build up the trust again that’s been lost between the parties in the dairy supply chain. It’s not the second best option, it’s the best option.” This was finalised at the Royal Welsh Show on 23 July.
He also called on farmers in the UK to work on having more producer organisations, and noted there will be money available for developing markets for producer groups from the government.
However, he warned the assembled that the government would not be fixing prices. “I know there are some here who would like me to fix prices like the old days of the Milk Marketing Board, but those days are not coming back.”
Paice also issued a challenge to processors to chage tactics: “Why not grow demand rather than constantly battling over bottling? Where do they expect their dairy products to come from if you guys go out of business?”
One farmer noted that there has been a perfect storm of bad weather conditions, low prices and rising farm inputs. “Farmers can’t and will not produce with these differences in price,” he stated. “We have to sort the problem out now.”

The result
Protests have followed, at Asda, Morrisons and the Co-operative supermarkets, as well as Dairy Crest and Robert Wiseman, among others. NFU president Peter Kendall says, “These protests were extremely effective at raising the simple issue to consumers: that the farmers who supply milk to these retailers do not receive a price that reflects the cost of production for their milk.” Kendall has also met with Arla in Denmark over the cuts, and most major British retailers.
As of press time, there has been movement to alleviate the cuts. Morrison said it will increase the premium it pays dairy suppliers on milk by 2 pence a litre to 3 pence and introduce a support payment of 3 pence a litre because of the extreme wet weather that is affecting farmers in the UK. The Co-op said it will raise the premium it pays to 2.57 pence a litre immediately and to 4.27 pence per litre on 1 August. Meanwhile, the Asda supermarket chain said 17 July that it would increase prices by two pence per liter, offsetting a reduction by its processor supplier, Arla Foods Amba.
Wyke Farms, the UK’s largest independent cheese producer and milk processor, announced a flat rate supplement of 0.5ppl to be added to its milk price for August 2012. The increase from Wyke Farms is in response to the current challenging environment created by extreme weather, the cheese maker says.
Richard Clothier, MD says, “We hope that the farmers will use the money to cover winter feed because it is becoming clear that many will be struggling to feed the cows over the coming months.” ii
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