On Monday, the NFU warned that ‘ruthless’ price cuts risk “decimating” the British dairy industry, in response to the latest raft of milk price reductions.
 
On Friday, Arla became the latest milk buyer to drop its milk price – members will see their price drop by 0.75ppl from 1st February. This comes on the back of increasing UK and EU milk supplies and a stagnant, if not depressed, global market.
 
Commenting, NFU dairy board chairman Rob Harrison said, “With no sign of a market upturn in coming months we will inevitably see a large number of dairy farmers leave the industry. No-one can continue to produce milk at a loss.
 
“Dairy farmers are rightly questioning why this is happening. We know that global factors have impacted demand, the ruthless retail price war is still at large and milk volumes in the UK and across Europe continue to increase with no sign of slow down. Milk contract terms and pricing schedules are being changed with no negotiation, flouting the voluntary code, farmers are being put on notice and there are rumours of serious undercutting at processor level as milk buyers fight for market share at retail and elsewhere. It is a bloodbath and those suffering the most are our hard working dairy farmers.”
 
Harrison urged dairy farmers to look seriously at their own businesses and assess whether they can survive another period of low milk prices. Addressing farmers he said, “The NFU is meeting with banks regularly but take clear advice – I want you to speak to your own  bank, your consultant and your accountant. Producing milk at a loss benefits no-one and we all want a strong, resilient industry here in the UK.”
 
Turning to milk buyers, the NFU spokesperson said the union is seeking confirmation that processors aren’t taking advantage of the current market downturn, which has been the accusation levelled by protesting farmers in recent months.  Harrison said the NFU has written to retailers and is assessing their compliance with the dairy sector’s voluntary code, he said, “Once we have the responses we will clearly see who are treating farmers fairly and who aren’t.”  
 
He added, “Altogether the whole dairy supply chain needs to come together to look at ways of managing price volatility as the current situation is not sustainable for anyone.”