NFU dairy board chairman Mansel Raymond has spoken of the justified anger felt by many dairy farmers who are not currently getting a fair price for their milk when he when he addressed the Northern Dairy Conference today.

With ‘Making the supply chain work for farmers’ the focus of the conference, Mr Raymond said the anger demonstrated in recent weeks had intensified because - outside of the dedicated pools - there had been no significant price increases announced for December 1 despite the overwhelming case for an increase.

“I won’t beat around the bush,” said Mr Raymond. “As dairy farmers, we are not getting a fair deal at the moment, and we are justifiably angered by it. What’s more, I am utterly dismayed by the whispers I hear in the industry that we may see downward price movement early next year. Rather than allow these Chinese whispers to build pace let me blast them out of the arena once and for all. The very notion of a price fall is utterly ludicrous and anybody who buys into such a fanciful prospect clearly has no grasp or understanding of market realities.

“My message to milk buyers remains the same, but to avoid any doubt then let me make it crystal clear once again – farm gate milk prices should be going up and anything other than an urgent price increase will not be tolerated. Milk buyers should take this as a warning that we will not stand back. We will make our message heard loud and clear and take whatever responsible actions are required to make sure farmers’ voices are heard.”

Mr Raymond also set out a compelling case for why farmers should see a more positive return at the farm gate including:

• The cost of milk production is 27.5ppl and rising on the back of feed price hikes.
• Cheese markets remain firm with the MCVE – the market indicator for cheese at 29.5ppl
• EU milk prices average 27.6ppl while the current GB milk price average is 25.5ppl.
• The price of bulk cream is £1,480/tonne, providing an income of 8.17ppl to a liquid processor.

“So what are we doing about it? For a start, the NFU is the only organisation tackling the current market situation head on. In our Milk Robbery report we called on retailers to reduce the frequency of re-tendering contracts to limit the opportunities for ferocious undercutting by milk buyers, and we have increased pressure on retailers to set up premium dedicated cheese groups with dairy farmers. I have also written to the chairmen of the dairy farmer representative groups to ask them how they are challenging milk buyers on the milk price dissatisfaction farmers feel.

“Looking to our other big customers - those in the food service and non-retail sectors – the NFU has committed to hosting a briefing day to encourage them to take greater responsibility for dairy farmers and commit to sourcing British dairy products. And we have also started work on a ten-year lobbying plan for dairy to identify longer term strategic solutions to create a better-functioning industry.

“But the bottom line is this; all parts of the supply chain have a vested interest in maintaining a productive, profitable and healthy dairy industry so we can provide consumers with the produce they want - and make a profit from doing it. Nothing could be fairer than that.”