ARLA cuts farm-gate milk price from December 1

Its 3,000 British farmer suppliers will receive 26.84ppl after the co-op said continuing challenging world markets meant it had no option, but to reduce the price after holding it in November. It is more than 8ppl less than its farmers were paid in April and less than the average 30ppl cost of production.

On Tuesday, the Environment, Food and Rural Affairs Select Committee took evidence on the current dairy price situation.

Rob Harrison, NFU dairy board chairman, said that while low farm gate milk prices had been caused by increased global production and reduced global demand there were a number of things that could be done to cushion the impact on farms.

Ruthless retail milk discounting was not sustainable and would ultimately damage the sustainability of the UK dairy industry. He called for the remit of the Groceries Code Adjudicator to extend down the supply chain to cover farmers’ relationships with processors.

Mr Harrison said: “We believe this would bring better transparency to the impact of the ongoing liquid milk discounting that we’re all seeing in our retailers.

“The NFU has already written to all the major supermarkets to ask the simple question, ‘what are you doing to support British dairy farmers’, as there are a number of areas that can be improved.
“A number of dairy farmers are within dedicated supply relationships, but using milk as a loss leader puts downward pressure on the whole industry and while farmers’ margins are being squeezed by global and political issues we need our domestic retailers to support our farmers more than ever.

“Today, another milk buyer announced farm gate milk price cuts for December. We now need Government to do all it can to support a sustainable supply of milk going forward as we know the public are rightly proud of the high-quality dairy products British farmers produce.”

Mr Harrison said that although Government could not step in to the market, it could support dairy farmers at national and European level. “In Brussels, they can back the NFU’s call for a review of the intervention price for dairy products as well as a targeted re-opening of Private Storage Aid for cheese – something that can help rebalance the EU market.

“We’re also calling on them to continue their work on seeking new export opportunities and promoting our high quality dairy products both within Europe and outside.”
He urged policy makers to help push consumption by improving the labelling of dairy products to help consumers buy British, and to be more co-ordinated in their health messages and campaigns that dairy products are a vital part of a healthy, balanced diet.