Milk processors must be open and honest, says NFU

With dairy farmers across the country under severe financial pressure from low prices, the NFU is urging all milk processors to be open and honest with suppliers about their plans to get through the next year.

The call comes with UK milk supply continuing to be far ahead of levels in early 2015, global demand remaining sluggish and the industry about to enter peak production time during the ‘spring flush’.

NFU dairy board chairman Rob Harrison said: “It’s a simple message to all processors – dairy farmers need plenty of notice of any changes that are being considered so they can put in place a strategy for their business. We want to see processors managing the spring peak sensibly and importantly in consultation with their suppliers. Short sighted, quick decisions that threaten to drive hundreds of farmers out of business won’t help the supply chain in the medium term. Farmers need clear market signals to come from their processors so they can plan their production.

“In the Netherlands for example, the Dutch milk co-operative ‘Friesland Campina’ has put in place incentives for their farmers to reduce production – a 2c/l bonus for producing less than in 2015. Here in the UK we’ve seen milk buyers bring in new A + B pricing profiles with no discussion with farmers, while Muller has written to their suppliers giving notice on the Dairy Crest Direct formula – something that aided Dairy Crest farmers to manage their businesses in times of severe volatility and was utilised by a large proportion of non-aligned farmers. Why is it that some of our processors continue to ride roughshod over us with short-term, knee-jerk reactions while some of our EU neighbours plan properly and manage their response to the market signals?

“What we need more than anything is for all processors to actually talk to their suppliers and discuss the options available for both parties.

“The NFU is continuing to work hard on dairy members’ behalf and holding daily discussions with all the main milk buyers and asking these questions. But I urge all those processors to be open and honest with their farmer suppliers about the markets and to work with their farmers to plan for the weeks and months ahead.”

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