Further price cuts mean tough times ahead for dairy farmers

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NFU dairy board chairman Rob Harrison says the next few months will be extremely tough and that everyone must pull together for the sake of the future of the industry.

The call comes with a number of further milk price reductions; from today First Milk members supplying their creamery pools have seen another reduction in their milk price, Muller has announced a 1.35ppl cut to their suppliers. Meanwhile, Arla has given its direct suppliers 12 months’ notice on their contract as they’re struggling to find a market for this milk.

“I won’t lie – it’s really difficult out there for many dairy farmers and I honestly don’t see the situation changing in the short-term. The market remains extremely tough and buyers are concerned with the impact of the forthcoming Spring Flush. But AHDB Dairy figures show daily deliveries are coming back in line with February 2015 levels.”

Rob Harrison, NFU dairy board chairman

Mr Harrison, who steps down from his role as NFU dairy board chairman later this month, said: “I won’t lie – it’s really difficult out there for many dairy farmers and I honestly don’t see the situation changing in the short-term. The market remains extremely tough and buyers are concerned with the impact of the forthcoming Spring Flush. But AHDB Dairy figures show daily deliveries are coming back in line with February 2015 levels.

“To help manage supply and demand at processor level we’ve seen Dairy Crest, working alongside their farmer group Dairy Crest Direct, bring in a new production balancing scheme. We need more milk buyers to show responsibility in trying to match supply and demand – and this needs to be done alongside farmer suppliers.

“We desperately need help from the government and the EU who must both do more to ensure a sustainable future for the dairy sector and help make tools available for farmers to manage volatility.”

The NFU is calling for the following actions:

EU:

* The European Investment Bank (EIB) to speed up its work to refinance farm borrowings

* The European Institutions to take steps to alleviate the problems farmers are facing in the wake of the Russian ban

* The dairy intervention price thresholds to be reviewed.

* Fertiliser import tariffs to be removed to boost competition in the European fertiliser sector

Government:

* The RPA to speed up BPS payments and ensure that this is not a problem in future years.

* Improvements to the labelling of dairy products to ensure consumers are buying British

* Government agencies doing more to support the public procurement of British food