Dairy farmers face ‘target’ penalties

While recent years have seen dairy farm incomes suffer from a millk glut due to overproduction, this year’s poor summer could now see producers facing penalties for failing to produce enough milk.

And yesterday NFU Scotland called on milk buyers to adopt a commonsense approach to contractual milk price penalties following what the Met Office had confirmed was the wettest June for many producers since 1910. “As a result, many dairy farmers are not only facing reduced production and higher feeding costs, but also a potential penalty from their milk buyer for not hitting their projected target production,” said the union’s milk policy adviser, George Jamieson, who added that many producers had been forced to house their stock to protect pastures from poaching..

He said the union had contacted the main milk purchasers in Scotland in recent days, and urged them to take the exceptional circumstances into consideration before hammering producers with price reductions.

“While production estimates are useful, they can only be based on factors which producers can control – and clearly the weather has been well outside normal expected variations.”

He said that the main buyers had advised any farmers concerned about meeting production predictions to contact them and explain their position.