Muller has raised prices for its aligned members and offered clarification of its milk pricing decisions, as fresh milk price protests promised for Thursday night are set to target the processor’s operations.

Farmers For Action (FFA) called for farmers to assemble at locations in Shropshire, Derbyshire, Staffordshire and Somerset on Thursday evening, after protestors blockaded the Muller dairy at Market Drayton, Shropshire on Sunday evening in response to Muller’s decision not to increase the price paid to non-aligned farmer suppliers.

In a letter to Muller suppliers seen by Farming Online, Group CEO Ronald Kers said, “The fact that dairy markets are improving is very welcome news for us all. This will translate into higher milk prices.  However the timing is dependent on when we actually realise these higher returns within our business.  

“Being a diverse and well invested dairy business means greater protection from the extremes of a boom and bust commodity cycle. You, as a valued supplier, benefit from a milk price which is both stable and competitive in a market which is characterised by extreme volatility.”

Kers said that over the course of the dairy crisis, Muller’s competitors have changed contracts at short notice, exposing their farmer suppliers to spot market returns which fell as low as 7 pence per litre. He also said that Muller’s stated price is topped up by bonuses from customers - the retailer supplement - which Muller passes on to farmers separately from its stated prices, whereas competitors add the supplements into standard contract prices.

Turning to the recent uptick in dairy markets he said, “It is only right that [competitors’ prices] immediately reflect the changes in spot market values as the market begins to recover. But I would stress that whilst these increases are headline grabbing, they are only moving these competitor milk prices closer, on an average basis, to the price we pay you, our farmers.”

Referring to the FFA protests, the Muller boss added, “I note that your farmer board has been criticised by those who have no involvement or understanding of our business.”

Kers said again that Muller is confident that its own milk producers are not involved in protest plans, and hinted that some farmers involved in the protests have sought to become Muller suppliers themselves. Nevertheless, FFA maintains it has a mandate from disgruntled Muller suppliers.

The Muller CEO said, “Any work which is on-going with our farmer board is always halted when we are being threatened by illegal activity by third party farmer organisations at our sites” and suggested that blockades could lead to disruptions in milk collections from farms.

On Thursday, Muller also raised its formula milk price by 1.172p/litre for September - a second consecutive monthly rise after seven months of reductions - that will see prices rise to 26.005p/litre for around 200 Muller suppliers (around a tenth of the processor’s supply base).

FFA claimed the response from Muller demonstrates that its protests are effective. A statement on the FFA website on Thursday read, “For those who have disagreed with FFA's protest at Muller, today's announcement of their formula milk price for the 1 September shows we were completely vindicated in our action.

“Surely now, based on a market related formula price increase, Muller has no choice but to increase the base price to non aligned producers. Until that happens we will continue our actions.”