NFU warns of “crucial time ahead” as dairy farmers protest in UK

British dairy farmers expect milk buyers to seek markets that maximise the value of milk and dairy products, in order to secure future supplies, the National Farmers Union has said.  However, unrest is still abroad as dairy farmers have blockaded two Morrisons supermarket depots in West Yorkshire and Cheshire, as well as a Co-Operative depot. They are targeting the chains as they are First Milk customers, which has said it may cut farmgate prices for cheese processors. First Milk is blaming the retailers for refusing to pay higher prices for cheese.

Since the summer of 2012, around 85 per cent of milk procurement volume is now signed up to the Dairy Industry Code of Best Practice for Contractual Relations, the NFU says. This has led to most major milk buyers developing modern dynamic milk pricing mechanisms and the general public having a much better understanding of the situation facing British dairy farmers, the union notes.

NFU dairy board chairman Mansel Raymond says: “I’m not here to speculate; I want to focus on the facts, specifically one important fact. There is an insatiable and growing demand for dairy products globally. The GDT/Fonterra auction alone has seen values of dairy commodities rise by almost 40 per cent since early March. Nearer to home, European auctions have seen Gouda and Emmenthal values climbing and the UK dairy indicators AMPE and MCVE have reached 32.4 and 33.0ppl respectively for March, up 34 per cent and five per cent on the year. In fact we estimate that recent cream valuations would put AMPE above 35ppl today. So there is only one way in which the price of milk should go – and that is up.

“The backdrop to all this is that farmers are emerging from one of the hardest farming years in decades. Recent industry estimates put feed cost alone up by over 2ppl this winter as a result of higher inclusion rates and costs. Our message is a simple one to all those who buy, use and sell the milk that farmers produce. Farmers need and deserve a market price that fairly reflects the growing value of raw milk, that allows them to reinvest and that gives confidence for the future. Any part of the UK market that fails to achieve that risks losing supplies of dairy products to those companies who are taking the future of the British dairy industry seriously; that will be my message to retailers and food service companies in forthcoming meetings.”