A working group of farming organisations has met to assess the current state of the dairy sector and to review areas where they can work collaboratively.

Representatives from the NFU, CLA, Farmers for Action, National Farmers’ Union of Scotland, NFU Cymru, the Royal Association of British Dairy Farmers and the Tenant Farmers’ Association agreed on Monday that in the current market situation, it is vital that risk is shared fairly within the supply chain.

Wholesale commodity markets are still incredibly weak and prospects of any recovery in 2015 are looking increasingly less reliable and the working group agreed that an upturn is desperately needed. The groups agreed that the UK has become more exposed to global pricing, and that the effects of this have been exacerbated by political events including the Russian ban and a decline in purchasing from large markets.

In response to these pressures, they called for better risk management tools to enable farmers to respond immediately, and to ensure a secure future.

A and B contracts have been touted as one potential solution. However, farm groups said that these have been presented to farmers with “little or no discussion with farmers themselves.”

Farming representatives meeting to discuss the industry added, “All dairy contracts should help develop long-term relationships and not be undermined by speculative market manoeuvring by certain processors making opportunistic purchases of milk on the spot market.”

They expressed a desire to develop new ways of managing risk including establishing formulaic pricing mechanisms, longer term fixed price contracts and futures markets and prices.

The representatives announced that they will meet again towards the end of the month to continue discussions.