Dairy farmer and NFU dairy board chairman Rob Harrison said it was entirely unacceptable for Muller Wiseman to introduce these cuts - which come into force from March 5 – with the claim that it was an attempt to “remain competitive” in the milk market.
“We have seen the farm gate price dropping rapidly over the past nine months which has put many UK dairy farmers in incredibly difficult positions, with many considering their future in the industry. The fact that Muller has said the March price remains to be ‘one of the best available’ depicts a dire situation for the dairy sector,” said Mr Harrison.
“We can accept that this has been a result of dairy market declines - DairyCo figures clearly show that the cream income to a processor has fallen by 45 per cent since January lastyear. However, there are now some positive signs on the European market and FrieslandCampina increased its February milk price by €1.25 per 100kg milk and stated that ‘the upward price trend of foil cheeses, milk powders and butter’ will stabilise prices across their reference companies, and New Zealand has reduced its milk production forecast.
“To see Muller Wiseman declaring that it is following others with price cuts is a deplorable change in direction. We need to develop trust between processors and farmers to ensure that changes are reflected honestly and with clarity, ensuring that when markets do recover this happens quickly to stop farmers suffering.
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“Earlier this week, Dairy Crest announced that it was cutting the farmgate milk price by 1.5ppl but would not drop the price further before July. Although we are very frustrated by this further price cut, we are pleased that this at least provides some stability to its supplying farmers. We now need other milk buyers to offer similar assurances over the next few months, especially with concerns on the impact of the spring flush on milk prices.
“Unfortunately Dairy Crest’s price drop came immediately after Morrisons announced the result of its recent milk tender - reducing the volume of milk it will procure from Dairy Crest by a third and giving just one month’s notice. Such short term notice periods are completely unacceptable in the supply chain. The NFU has worked hard to ensure better terms and conditions between farmers and processors, but these mean nothing if changes can be made in such short timeframes higher up the chain.
“Retailers must seriously consider how their decisions impact on British dairy farmers in the short and longer term.”