Milk processors urged to pay farmers as much as they can

Practice should replace ‘as much as they can get away with’ argue NFUS

Scotland’s farming union has called on milk processors to pay farmers “as much as they can, rather than as much as they can get away with”.

NFU Scotland milk policy manager George Jamieson welcomed recent milk price announcements by some processors but said prices needed to be increasing further.

He said milk market indicators AMPE and MVCE had now risen 60% on the year to between 36 and 37p a litre, however milk prices had only risen by around 30% to 27p a litre during that same period.

“We strongly encourage milk buyers to acknowledge the market and the needs of their supplying farmer ‘partners’,” said Mr Jamieson.

“Processors should pay as much as they can, rather than as much as they can get away with if they are to inspire loyalty.

“It cannot be stressed enough that the recent severe, extended period of very low prices has left serious and longlasting damage to dairy farmers’ balance sheets and confidence, which has, and will impact on future investment on farm, with long-term consequences on the competitiveness of the Scottish dairy sector.”

He said the union had long called for collaboration between farmers and the supply chain to ensure risk and reward were shared by everyone.

“We believe current contracts for the most part are not fit for purpose, with pricing and volume management having significant room for improvements,” continued Mr Jamieson.

“We need to develop more sophisticated risk management tools and we have more to do to develop effective collaboration.”

He praised the work of some processors, including Muller which plans to allow farmers in its non-aligned pool to fix the price of a proportion of their milk for 12 months, and Lactalis for its new annual minimum price agreement.

Muller, which caused controversy last year when it shut the only milk processing plant in the region, is introducing a new Muller direct Futures Contract option.

The option will allow farmers to agree a monthly price for up to 25% of their milk volume for 12 months ahead.

It will be available to 700 of Muller’s 1,200 farmers who are not part of groups aligned to major supermarket customers.

The dairy giant has also announced plans to introduce a new service to dairy farmers , Muller Farm Insight, offering data, welfare and benchmarking tools.

Muller also confirmed plans to increase its standard litre milk price by 1.31p to 29p a litre on September 1.

Milk prices have been slow to rise in conjunction with milk market indicators.

George Jamieson.