NFU Scotland’s call for fundamental changes in milk supply arrangements has been discussed with a group of English dairy farmers after the Union took up an invite to address producers in the NFU’s West Midlands region.

NFU Scotland Milk Committee member Rory Christie and Milk Policy Manager George Jamieson presented the NFUS milk pricing formula initiative to the meeting in Harper Adams College in Shropshire on Wednesday (27 July), following an invite from NFU’s dairy board milk member Michael Oakes.  NFUS shared a platform with NFU’s Chief Dairy Advisor, Rob Newbery who also provided farmers at the meeting with an update on milk contracts and the positive developments from recent and ongoing political activity.

The NFUS initiative looks to deliver a more sustainable dairy supply chain.  A key element is the desire to see a transparent pricing formula based on existing market indicators made a compulsory element of contracts between dairy farmers and their milk buyers. Mr Oakes had previously been briefed on the pricing initiative when NFUS representatives attended an NFU dairy board meeting in May, and was keen to allow more English producers the opportunity to learn more ahead of the NFU Scotland dairy debate being held at this year’s Dairy Event in Birmingham on September 6.

Significant momentum is now building in a number of areas within the dairy sector - both in the UK and in Europe - all of which is aimed at driving beneficial change into the dysfunctional dairy supply chain, delivering a fairer deal for dairy farmers and developing a more sustainable long-term future for the dairy industry.

Milk Policy Manager, George Jamieson said:
“This is a campaign that has the ultimate aim of working together with the supply chain in a progressive professional manner to develop a competitive collaborative dairy industry that can compete effectively in the UK and world market.  It presents an opportunity and not a threat to processors and retailers alike but it is built on the premise that the existing status quo is not an option.
“We believe one key element to progress in the dairy sector is for an effective, market related, transparent pricing formula being incorporated into every contract between a dairy farmer and his milk buyer.  That formula should be agreed in advance, should react to the true market for milk and dairy products and set a current market related value on raw milk.

“We received the unanimous backing of more than 500 dairy farmers in Scotland when we rolled out our proposal in May and the reaction of the English farmers present this week was very positive, believing our initiative to be both innovative and credible. 

“It is the nature of our milk industry that any change needs to be delivered nation-wide.  It is essential that producers across the country work together to motivate milk buyers to accept that the current dairy supply arrangements are unsustainable and that there must change within the sector if producers and processors want to be in a position to compete in a growing and buoyant global dairy market.

“NFU Scotland's proposals and ongoing work with NFU have created a great deal of discussion and our ambition is to fuel the debate across the country in an effort to evolve a pricing structure that truly reflects the value of milk. We are willing to work with any and all in the dairy sector to facilitate and promote the change that is clearly required. It is crucial that stakeholders truly understand our work and policy and the invitation to share a platform at an NFU regional meeting was another very worthwhile step in our campaign.

“The timing couldn’t have been better.  The publication of reports this week simply confirm the dysfunctional nature of existing dairy supply chain arrangements and, thanks to joint lobbying by the UK unions, the political desire is growing to see wholesale changes that deliver a fairer deal to milk producers.  That political desire is clearly evident both at home and in Europe.

“September marks the next major step in our campaign.   By then, we will have given all parts of the dairy chain adequate opportunity to consider our proposals and take on board the recommendations of politicians and others. We will have a platform at the Dairy Event in Birmingham on 6th September.   For the long term health of the UK dairy industry, we will be inviting all parties to come and meet with us at that event with a positive response and an improved vision for the sector.”  Ends

Notes to editors
 The NFU Scotland initiative was launched in May.  Developed in conjunction with dairy farmer representatives from every major milk supply relationship in Scotland, as well as technical and legal experts, it includes a proposal for a price formula potentially based on the existing market indicators of AMPE and MCVE to be incorporated into all milk contracts between dairy farmers and their milk buyer.  AMPE (Actual Milk Price Equivalent) is an estimate of the price that dairy processors would pay for milk to manufacture into butter and milk powder.  MCVE (Milk for Cheese Equivalent) is a benchmark of the value returned from processing milk into mild cheddar.
 The Union presented its proposal to more than 500 Scottish dairy farmers in May at a series of open meetings and received unanimous backing from those who attended.
 A series of meetings with fellow farming Unions, milk processors, retailers and trade bodies have taken place in private since then.
 The Union will be hosting a debate at the Dairy Event in Birmingham on 6th September where it will invite all interested parties to give their views on the proposal. 

Date Published:

News Article No.: 134/11

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