NFU Cymru has made calls for producers to increase the price paid per litre to Welsh producers who otherwise, the union says, will face a “long and unprofitable winter.” Rising feed, fertiliser and fuel costs have made for bleak prospects for dairy farmers this winter. image expired

In response to the pressure farmers throughout the UK are facing, the union has called upon processors and milk buyers to pay their producers 32-33pence per litre. The current UK average stands at 26.61ppl.

The union said such a large price increase was necessary because of the massive increases in input costs over the year; NFU Cymru revealed intensive energy dairy rations are up 28 per cent on last year’s costs, low energy rations 33 per cent and protein rations have increased 20 per cent since 2010. Furthermore, conserving home grown forage will be expensive as Ammonium Nitrate prices have increased by 50 per cent compared to this time last year and agricultural fuel is up by around 25 per cent. Despite these drastic rises, the farm-gate milk price has increased just 11 per cent.

NFU Cymru pointed out that profits from dairy products had risen this year, although producers have yet to feel the benefits. Under the current system increased profits are slow to move back along the supply chain, although, paradoxically, shocks are felt extremely quickly.

David James, chair of Pembrokeshire NFU, who is himself a dairy farmer, lamented "The gap continues to widen between what we receive for our milk and what it costs to produce. What makes it all the more annoying is that based on market conditions we should be receiving around 32-33 pence a litre for our milk rather than the UK farm-gate average of 26.61ppl. This price based purely on what the market can and should be paying producers for their milk is the difference between profit and loss."

Mr James said action needed to be taken on the findings of recent reports on the UK dairy industry. He explained, "The European Commission High Level Group, EFRA select Committee and a recent DairyCo report on Asymmetric price transmission in the dairy supply chain all pinpoint the weak position of farmers which can only be addressed by improving our negotiating and bargaining power. The evidence overwhelmingly points to a need to build in fair and equitable trading conditions for farmers within the supply chain."

He welcomed the European Commission’s proposed dairy package and urged farmers to use every opportunity to get their message across to their political representatives, using the summer’s country shows to increase awareness of the situation and attempt to secure a fair return for dairy producers.