The NFU has praised Dairy Crest for raising prices for its suppliers this week, and said other major players need to do more to support the farmers on whom they rely.

Following First Milk’s announcement of a 1ppl price cut, which coincided with resignation of chair Sir Jim Paice last Wednesday (24th June), Arla announced that it would cut members’ prices by 1.18ppl on Monday, and Muller followed suit with a 1ppl cut on Wednesday.

Bucking the trend, Dairy Crest announced on Thursday that it would hold prices steady for suppliers on its standard liquid milk contract, and offer a small increase of 0.25ppl for farmers on its Davidstow contract.  

Reacting to the developments, NFU dairy board chairman Rob Harrison said, “It is encouraging that at last we have seen a positive move on milk prices after a series of negative cuts in recent weeks. Dairy Crest has bucked the downward trend and has shown some support for their farmers, with a small increase for the Davidstow contract, and I applaud them for that.
 
“Last month we saw cream income to the processor increase nine per cent, and for a business that has strong brands and a strong domestic market, Muller needs to be far better at explaining why they are dropping the price. This just smacks of a run to the bottom, which is deplorable behaviour for any business, especially when dairy farmers are fighting for survival.”
 
Discussing wider trends in the sector, he added, “Yes, milk production is still up in the UK, but across Europe volumes are starting to ease, and estimates for European production increases for the year are up at 1.6 per cent, significantly less than last year. Global demand for dairy products is still increasing by a steady two per cent each year.

“Milk buyers need to be clear with their suppliers of the volumes required to satisfy current contracts, but also to do their utmost to seek new markets for any extra milk produced and attain the highest value for those products, not just pass the buck down the supply chain.”