Blog: Time to take collective responsibility for the future of dairy

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Lucia Zitti, NFU staff, economics, blog_275_410Farmers at home and abroad have been demonstrating about the price they are paid for their dairy products. NFU economist, Lucia Zitti, explains why this is now a crisis.

She writes:

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The NFU, NFU Cymru, NFU Scotland and the Ulster Farmers Union are holding an urgent summit in London on Monday to address ways that retailers, processors, Government and shoppers can back British farming and the sustainability future of our industry.

Some people are asking us if things are as bad as we make out. Is the UK dairy sector really going through a crisis?

The simple answer is “yes”. Even the reluctant EU Commissioner Phil Hogan finally admitted that the UK dairy industry is in “very serious difficulty’’.

In the first six months of 2015 UK dairy farmers’ revenues decreased by about £57million compared to the previous year (down from £244million to £187million). With more price cuts announced for August and September, it is not unrealistic to think that farmers will collectively receive £100 million less this year than they did last year.

There is a vast range of milk prices on offer in various contracts which gives an indication of the complexity of the situation and highlights that different companies have different approaches. For instance, Muller Wiseman farmers supplying Tesco with received 30.9ppl for milk produced in May 2015 while farmers supplying milk to First Milk cheese contracts received 21.4ppl for 80% of their milk supplied that month. Since then all the major processors have announced further cuts throughout the summer, with some First Milk farmers now receiving less than 16ppl.

How much more can dairy farmers take before they decide to give up? The official figures show that the number of dairy farmers in England and Wales has constantly gone down over the time. Since January 2015, 236 farmers have left the dairy sector. But British shoppers tell us that they want to buy our product – earlier this year 85% said they want to British supermarkets to sell more food produced on British farms

The NFU continues to call on the Government, retailers and processors to take more collective responsibility for the future of the British dairy industry. We all have a stake in our future food supply.