By Bruce Mackie, NFU Scotland Milk Committee Chair
It’s been a bruising few weeks for Scotland’s dairy sector. Almost every milk buyer has announced a cut to prices for October and November – and the scale and speed of those cuts have left many of us reeling.
We all knew some weakening in milk price was likely this autumn. Record milk volumes here in the UK, and growing production across Europe and beyond, have inevitably put pressure on the market. But the size of these cuts, and how quickly they’ve come, has caught people on the hop. For many, it feels like the rug has been pulled from under them just as we were finding our feet again.
Below the Cost of Production
The Scottish Farm Advisory Service’s latest figures make for grim reading – predicting prices well below the estimated cost of production. That means plenty of farmers will soon be producing milk at a loss, something that simply isn’t sustainable in the long term.
Every dairy farmer I’ve spoken to lately is running the numbers again – looking hard at feed costs, at yield, and in some cases, at herd size. Some are considering culling unprofitable cows while cull prices are strong. These are not decisions any farmer takes lightly.
The Price Gap That Makes No Sense
What continues to anger and frustrate many is the huge gap between the highest and lowest farmgate prices being paid in Scotland. That gap remains unprecedented and unjustified. It’s very hard to explain to a hardworking dairy farmer why their milk is worth 5 or 6 pence less per litre than their neighbour’s, when both are producing the same high-quality product to the same standards.
Reactive Cuts – But Will Rises Be Just as Fast?
We understand the reasons for the downturn – high production everywhere and a good year for milk solids have played their part. But while these cuts have been swift and reactive, the real test will come when markets turn upwards again.
We’ll be watching closely to see how quickly processors pass any recovery back to the farmgate. That’s where transparency and fairness under the new statutory milk contract legislation must bite. Farmers have a right to know exactly why their milk price moves the way it does and to challenge it if they believe the rules haven’t been followed.
Speaking Up for Scottish Producers
NFU Scotland President Andrew Connon has initiated discussions with key milk processors to discuss the impact of these price cuts, and I’ll continue to engage with all milk purchasers.
We’ll also be meeting the Agricultural Supply Chain Adjudicator at AgriScot on 19 November to raise the question of whether some of the steepest cuts we’ve seen were made in the spirit of the new legislation. Farmers can take heart from the fact that there is now a clear route to raise complaints – formally or anonymously – if they believe their buyer hasn’t followed the right process.
NFU Scotland will also be using AgriScot and the Dairy Hub Seminar to engage with all key stakeholders – including processors, retailers, Red Tractor and AHDB Dairy – looking to them to do everything within their influence to restore confidence, fairness and profitability to the dairy market. We’ll be urging collective action to get the sector back on track and ensure that everyone in the chain shares the responsibility for a sustainable future.
Context Matters
I also want to add a note of realism. It’s easy to point fingers at particular processors or retailers, but the reality is complicated. Some processors – especially co-ops – are running flat out and drawing milk from across the UK to keep plants full. That helps maintain efficiency and, in turn, can mean better returns for their farmer members. So while we should always promote Scottish dairy, we must do so with care and context.
For farmers themselves, this difficult period may also be a time to take a hard look at herd management. Rather than trying to produce more milk to chase income, it could be wiser to reduce output slightly – selling poorer performing cows while cull prices remain high. That approach can help ease pressure on costs, protect margins, and avoid marginal litres coming on the market at a time when oversupply is already driving prices down.
Looking Ahead
The next few months are going to be tough. There’s no getting away from that. But our sector is resilient. We’ve been through ups and downs before, and we’ll get through this too.
What matters now is holding everyone in the chain accountable. If milk prices can drop this fast when markets soften, we’ll be making sure they rise just as fast when things turn the other way.
NFU Scotland will keep pushing for fairness, transparency and respect for the people who make this industry what it is – the farmers who get up every morning to milk their cows, regardless of the weather or the market.
We owe them more than a price below the cost of production.