COMPANIES IN THE foodservice sector must commit to British farmers and pay them a fairer price for their milk. That’s according to the Dairy Coalition, which has warned that milk supply could be jeoparised if no progress is made on some of the “lousy contracts” currently in place.
In the short term, the coalition, which is formed of various farming groups including the NFU and the Tenant Farmers Association, has called for urgent and meaningful farm gate price rises for April 1st, to ensure a realistic market price. Challenges of poor weather, infertility and feed shortages mean that farmers can only respond to demand for more milk if they are paid a proper price by foodservice companies, processors and retailers, it said.
NFU dairy board chairman, Mansel Raymond highlighted yesterday’s Fonterra auction result, which saw significant price rises in key commodities such as cheese, butter and milk powders, with all products up 14.8% on the previous month.
“This clearly demonstrates that globally, demand is strong and supplies are tight,” he explained. “Yet we’re still hearing that crippling deals being done in the domestic cheese and liquid markets are putting milk prices under pressure.
“The average UK farm gate milk price for January was exactly 30 pence per litre [ppl], this masks the range of prices being paid from less than 27ppl to over 33ppl, which is barely a penny ahead of this time last year. For UK dairy production to have a sustainable future, the only way these prices can possibly go is up.”
NFU Scotland milk committee chairman, Gary Mitchell, added: “Strong market demand signals are being blocked by lousy contracts, poor labelling and an apparent lack of commitment to British by some important retail and foodservice businesses.”
Mitchell called for all milk buyers to sign up to the voluntary code.
By the end of the month. The coalition has threatened to name and shame any companies that don’t sign up within this time frame.
The issue of milk prices reached a climax last year with huge farmer protests and emergency summits called by the government. Foodservice companies have, to date, been reluctant to provide details on the prices they pay for milk.