Farmers demand share of price rise

The NFU's new dairy board chairman, Welsh farmer Mansel Raymond, went on the attack after a report he ordered was published this week with the title The Great Milk Robbery.

In comments aimed at the new government as well as the industry, Mr Raymond said it was clear, from wholesale prices, that the processors in the middle of the milk chain were getting a lot of extra money from better market conditions which they were not passing down to farmers.

He said: "Total revenue to processors from dairy commodities in May 2010 was 19m higher than in May 2009. This is equivalent to an average increase of 4.3 pence per litre, which is far from reflected in increased returns to dairy farmers.

"No buyer has yet announced any increase of a scale that stands up against our analysis of what farmers should legitimately expect."

He said the reasons included constant discounting on dairy products and of shareholders' and consumers' needs given priority over farmers and concluded: "We are asking for immediate and substantial increases in farmgate milk prices and a fairer approach to milk contracts that allows producers to share in the spoils."

Dairy farmers' spokesmen in Yorkshire agreed wholeheartedly. Martin Burtt of Glaisdale, near Whitby, said: "The price rises we have seen are minuscule and nowhere near enough when we are still losing producers every day."

And David Shaw of Elvington, near York, said: "The whole system is about keeping farmers just managing for today. There is no thinking about tomorrow."

A spokesman for Robert Wiseman, the biggest milk buyer in the UK, said its business was centred on liquid milk and the NFU was counting the prices of by-products like cream and cheese, which went up and down. Payments to farmers were dictated by competition for business and competition for supplies. They were currently under review, because supplies are tight.

But farmers have come to expect only fractional increases from that kind of review. In Canada, they point out, milk prices are linked to average business profitability and farmers get nearly twice the UK rate.

Arla, which processes milk for Asda, delegated its response to the industry body, Dairy UK, whose director general, Jim Begg, said: "The dairy supply chain doesn't exist in a vacuum that allows individual elements to make pricing decisions out of step with the markets and consumers. The NFU report does not address consumer issues at all."

A consortium of Irish farmers, trading as Velmur Ltd, wants to start milking nearly 3,000 cows near Grantham, Lincs, it was revealed this week. An earlier proposal for an 8,000-cow dairy farm in Lincolnshire was shelved in the face of hostility. But farmers all over Europe say small-to-medium operators are being forced out of business and politicians must act if they do not want to see American-style factory farms.

CW 12/6/10