Dairy Crest and First Milk has become the latest British dairy processors to announce a cut in its milk prices paid to farmers from 1st February 2015. The cut by 1.2ppl and 1.6ppl respectively for farmers followed Arla who also said they were also going to cut their price. 

With an additional 1.2 billion litres of milk likely to be produced by farms in 2014, the UK processing sector is struggling to find a market for the unprecedented increase.

“I feel desperate for those 3,000 dairy farmers supplying Arla who’ve been delivered the worst possible Christmas present. It couldn’t have come at a worse time and this latest reduction will continue to place huge pressure on cash flows for these farmers in the months ahead. It is vital that we don’t see this trend continue through other processors’ February price announcements,” said NFU President Meurig Raymond.

“For the first time producer numbers have dipped under 10,000 with 60 going out of business in November alone. We will continue to put pressure on Government, retailers and the processors with the aim of trying to rebuild an economically sustainable dairy industry. We cannot emphasise enough how awful this downward spiral has been for the dairy industry in the UK.”

NFU dairy board chairman Rob Harrison said: “Today’s announcement from Arla is yet another body blow for the industry and will further devastate dairy’s bottom line.

“But despite this news, dairy farmers across the country, including myself, will continue to provide the nation’s milk – working 52 weeks a year, without a break, and yes, even on Christmas day we’ll be up and in the parlour at 4am before being able to spend some precious time with our children and families.

“All we ask is that the public continues to buy British dairy products over the festive period, including British cheese, look out for the Red Tractor logo and continue to back British farming.”

First Milk Chairman Sir Jim Paice, said: “During meetings which we held across the country in November, we shared our view with members that this market was likely to get rougher before it gets better. Unfortunately prices for core dairy products have softened further since the start of December.

“The rest of the Board and I remain acutely aware of the difficulties that the extreme market volatility is causing our members and dairy farmers around the world.

“We do not know how long this current downturn will last, however our priority is to make the business and our manufacturing assets as secure as possible in order that we can continue to process and market every litre of members’ milk.”


Producer confidence in the sector is decreasing as NFU’s annual confidence survey showed, which concluded that producers expected negative impacts on their businesses in the coming year relating to regulation and legislation (77%); CAP reform (59%); output prices (56%) and input prices (52%).


NFU President Meurig Raymond added: “This year has seen farmgate prices falling across various commodity sectors – arable, dairy, livestock and mixed - and this increased volatility has clearly impacted on our members’ confidence.

“At the time we spoke to our members, wheat prices were down 30 per cent year-on-year. Similarly, global dairy prices were down 45 per cent all the while during a backdrop of sweeping cuts to the price of milk in this country. 

In beef, prices fell to three-year lows earlier this summer while potato prices are 24 per cent lower than they were this time last year. 

"With the extent of those price shifts, it’s not surprising that less than one in ten NFU members anticipate improvements in profitability.”