Following an announcement made last week by dairy processing giant Robert Wiseman Diaries that it will be cutting the price paid to its farmer suppliers by a further 1.7 pence from August, activist farmers have pledged to protest this latest round of cuts, which have seen Wiseman reduce their farm-gate price by almost four pence in the space of two months.

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Militant farmers’ group Farmers for Action today said “It looks as though FFA will need to take to the streets again.” The group announced this morning that it would begin to protest falling milk prices, which it feels risk jeopardising farmers’ ability to continue producing milk sustainably.

Although price cuts have been announced by major processors, FFA has blamed supermarkets, and identified two in particular, stating, “The radar is clearly showing it is the usual culprits starting with none other than our friends at Tesco and Asda.” The group accused the two retailers of entering into a price war earlier in the year, in which they made efforts to drive down the prices of a number of grocery items, including dairy products.  

In a statement made this morning the group said, “Wiseman says the latest price cut is due to falling cream prices yet we all see the TV advert where our friends at Tesco are giving cream away free.”

Cuts from the major processors, which began in April with a price cut announced by Dairy Crest, have brought milk prices back below the cost of production, just as the UK’s position in the European Milk Price League Table was beginning to rise.

This morning also saw Dairy Crest announce further price cuts for suppliers on its standard liquid agreement, effective from 1st August. From next month, farmers will receive 1.65 pence per litre less for their milk; the company said upon announcing the price cuts that there would be no further cuts this year.

Parroting claims made in late April, when the processor gave its suppliers four days warning of intentions to cut prices, Dairy Crest blamed challenging market conditions. Farmers on the company’s Davidstow contract will not be affected.

From August, Robert Wiseman will be paying its producers 24.73ppl for milk they supply and Dairy Crest 24.94ppl. The cost of milk production has been estimated at over 30ppl and is set to rise towards the end of the year, as fuel, feed and fertiliser become more expensive.

Farming Unions have reacted with outrage to the news of further cuts. They argue these cuts have taken effect before producers could feel the benefits of a recent profitable run for milk and have said cheese, cream and butter markets are beginning to show signs of stability.

Farming groups including the NFU have called for government intervention to secure more equitable relationships in the supply chain, including the introduction of a code of practice such as the one governing dealings in the groceries sector. Dei Davies, chair of the FUW milk and dairy produce committee, said yesterday, "We are going back to a downward spiral of farm-gate milk prices and the industry needs to look at the issue of milk contracts more seriously. 

"Why should our dairy farmers have to carry the burden of falling milk prices again and again? These companies are playing Russian roulette with our dairy industry and if this carries on there won't be a dairy industry for much longer. Dairy producers are being put into an impossible situation. It is about time that the Government intervenes as a matter of urgency to ensure that we have a dairy industry in the future.”

NFU Cymru Deputy President Stephen James said “Today’s news is clear exploitation of the weak position that farmers find themselves in and backs up yet again our claim that something is fundamentally wrong with the dairy supply chain.

“Wiseman has blamed the falling cream values that are causing losses in their business as their reason to cut farm gate milk prices but why should they just pass this loss onto their farmer suppliers. If Wiseman have sold processed liquid milk into the market place at a price that can only cover costs of production, when propped up by record high cream values like those seen in April 2011, then their business strategy is unsustainable and farmers will be considering their options going forward.”

Farming unions have attempted to expose the duality that exists within the dairy supply chain at present; many farmers must give 12 months’ notice of the intention to end a contract, whereas suppliers need only give 24 hours’ notice. Unions claim this reinforces imbalances which exist between powerful retailers and processors and their suppliers. European group Copa Cogeca has encouraged farmers to form cooperatives to better stand up to major players in their sector.

Farmers for action urged dairy farmers to “Remember the saying, 'united we stand, divided we fall', that should be very clear to everybody including our fellow farmer representatives.”

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