NFU calls for transparent relationships in dairy supply chain

The UK dairy industry desperately needs the support of all end users of milk – from retailers’ right through to coffee shops, hotels and wholesalers – as we suffer another raft of farmgate milk price cuts, the NFU dairy board said today.

While the global dairy industry has seen an imbalance in supply and demand, the majority of milk produced in the UK is processed and consumed domestically. This should offer some security for our farmers, but we have seen farmgate prices at cripplingly low levels over the past 12 months, and the latest raft of cuts is more than most farmers can bear for any length of time.

Farmers are concerned about the heavy discounting of milk at retail, as it devalues the product and could reduce the sustainability of the whole supply chain.

As the Livestock Event opens today at the NEC, Birmingham, NFU dairy board chairman Rob Harrison, a dairy farmer from Gloucestershire, said: “Let me be absolutely clear – if the supply chain isn’t sustainable, dairy farmers will go out of business. Cheap today; gone tomorrow. That’s not just bad for farmers – it’s bad for processors, retailers and consumers, all of whom want to see British milk on our supermarket shelves tomorrow, not just today. Consumers want to see investment in new products and technologies, but farmers are struggling to stay in business at all, let alone invest for the future.

“Many of our dairy farmer members are feeling completely helpless, being driven to breaking point, haemorrhaging money, and leaving the industry in their droves. I can sympathise with how dairy farmers are feeling at the moment. Put simply, dairy farming once again finds itself in depression, and the anger out there across the industry is evident.

“A number of retailers have worked to make their milk supply chains sustainable – the likes of Tesco, Sainsbury’s, The Co-operative, Waitrose and M&S have schemes in place that pay their farmers a fair price that reflects the costs of producing milk. In food service, we know that Nestle and Cadbury’s already have dedicated relationships with groups of farmers and we’d like to see this model of direct and sustainable relationships developed across other food service providers and food companies.

“However, the situation isn’t as clear with other major retailers such as ASDA, Lidl, Aldi and Morrisons, or with other outlets where dairy products are sold. It’s now time that these companies start showing the public and their farmers that they are prepared to deliver transparency and sustainability, and particularly to make sure that farmers are not funding retail price wars.

“We know the British public care about dairy farmers, and a recent Mintel report has shown that consumers are willing to pay more for the milk they buy. Retailers and processors need to understand that there’s a value – and not just to farmers – in creating and investing in long-term sustainable relationships with dairy farmers.

The NFU has a number of meetings scheduled with retailers and other milk outlets over the coming months where we will push this message.

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