More milk price misery ahead

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With all Scottish dairy farmers facing further milk price cuts this May and June, NFU Scotland has called on milk processors and retailers to accept a greater share of the costs and risks involved in producing milk or cause irreparable damage to Scotland’s production base.

All major milk buyers in Scotland – Muller, First Milk, Lactalis, Arla, Grahams - have now announced further milk price cuts to come into force in the coming weeks. Many Scottish dairy farmers are now well into a second consecutive year where milk prices are substantially below the cost of production with little likelihood of any uplift in the months ahead.

NFU Scotland remains adamant that most of the burden of low milk prices has been foisted onto producers, and this must be addressed by milk processors and those selling dairy products.

Speaking from Brussels, where he is attending European meetings on the dairy crisis, NFU Scotland’s Milk Policy Manager George Jamieson said: “While we can accept that the collapse in dairy commodity prices is a global issue, there is a strong argument that other parts of the chain are forcing a disproportionate share of weak market prices onto producers.

“Milk processors, while under competitive pressure, continue to use their power of discretionary pricing to manage their margins, as they compete for market share. While at the retail end, there is little sign that consumers are benefitting from some of the weakest dairy markets in living memory as retail prices remain virtually unchanged.

“It may be simplistic, but retail prices for cheddar have only reduced marginally to around £5.85 per kg (equivalent to £5850 per tonne) while wholesale prices are down to well below £2000 per tonne. That is a huge margin being made at the retail end.”