Contracts and Markets Must Deliver for Dairy
Dairy farmer frustration can only be addressed by immediate price rises and improved milk contracts according to the Dairy Coalition, who met this week.
The coalition – NFU Scotland, the NFU, NFU Cymru, Farmers For Action, Tenant Farmers Association, Women’s Food and Farming Union and the Royal Association of British Dairy Farmers - met this week and agreed its priorities were to ensure the delivery of a sustainable milk price.
It is also seeking the rapid delivery of improved contracts for farmers, in line with the recently agreed voluntary industry code. It called upon all processors and Dairy UK to accept the terms of the ‘Dairy Industry Code of best Practice on Contractual Relations’ and focus on delivering its full implementation without delay.
According to latest industry estimates, a break-even cost to produce milk is 32 pence per litre (ppl), yet milk prices achieved on farm are as low as 25ppl, and typical liquid prices are between 29ppl and 31ppl. DairyCo estimates suggest milk production will be down by 7.3 per cent this year as a result of the various pressures on-farm including the difficult weather conditions.
Gary Mitchell, NFUS dairy board chairman, said:
“It’s no wonder farmers are frustrated. Costs on-farm are increasing daily, milk prices are stubbornly refusing to keep up and, as a consequence, production is falling back.
“What farmers need now is confidence in the future; a sustainable milk price that recognises improving markets and costs and real improvements to contracts in line with the contracts code will certainly help with this.
“It may take time to amend contracts, but Dairy UK has been working with us on the code for over a year and processors have had the final approved text since October.”
NFU dairy board chairman Mansel Raymond said:
“Delivery of the code was a key success following the efforts of dairy farmers and the coalition during the summer of 2012. However, farmers now expect action as a result of this agreement. We expect all milk buyers to amend contracts to ensure they are compliant with the code and do it without delay.
“If farmers are to have confidence in the code as a mechanism to deliver better conditions and market returns, processors have to show they are committed to it. In the short term, we expect the default answer of milk buyers to be ‘yes we will honour the code’, rather than ‘no we’ve not had time to amend your contract’.
Notes to editors:
- On Monday December 10, members of the Dairy Coalition met in London to work on delivery of the Coalition’s 10 Point Plan to improve the position of British dairy farmers.
Ends
Contact Bob Carruth on 0131 472 4006
Date Published: 13/12/2012
News Article No.: 149/12
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