The UK dairy industry desperately needs the supportof all end users of milk from retailers right through to coffee shops,hotels and wholesalers – as we suffer another raft of farmgate milk pricecuts, the NFU dairy board said today.
While the global dairy industry has seen animbalance in supply and demand, the majority of milk produced in the UK isprocessed and consumed domestically. This should offer some security for ourfarmers, but we have seen farmgate prices at cripplingly low levels over thepast 12 months, and the latest raft of cutsis more than most farmers can bear for any length of time.
Farmers are concerned about the heavy discountingof milk at retail, as it devalues the product and could reduce thesustainability of the whole supply chain.
As the Livestock Event opens today at the NEC,Birmingham, NFU dairy board chairman Rob Harrison, a dairy farmer fromGloucestershire, said: Let me be absolutely clear if the supply chain isntsustainable, dairy farmers will go out of business. Cheap today; gonetomorrow. Thats not just bad for farmers its bad for processors, retailersand consumers, all of whom want to see British milk on our supermarket shelvestomorrow, not just today. Consumers want to see investment in newproducts and technologies, but farmers are struggling to stay in business atall, let alone invest for the future.
Many of our dairy farmer members are feelingcompletely helpless, being driven to breaking point, haemorrhaging money, andleaving the industry in their droves. I can sympathise with how dairy farmersare feeling at the moment. Put simply, dairy farming once again finds itself indepression, and the anger out there across the industry is evident.
A number of retailers have worked to make theirmilk supply chains sustainable – the likes of Tesco, Sainsburys, TheCo-operative, Waitrose and M&S have schemes in place that pay their farmersa fair price that reflects the costs of producing milk. In food service,we know that Nestle and Cadburys already have dedicated relationshipswith groups of farmers and wed like to see this model of direct andsustainable relationships developed across other food service providers andfood companies.
However, the situation isnt as clear with othermajor retailers such as ASDA, Lidl, Aldi and Morrisons, or with other outletswhere dairy products are sold. Its now time that these companies start showingthe public and their farmers that they are prepared to deliver transparency andsustainability, and particularly to make sure that farmers are not fundingretail price wars.
We know the British public care about dairyfarmers, and a recent Mintel report has shown that consumers are willing to paymore for the milk they buy. Retailers and processors need to understandthat theres a value and not just to farmers – in creating and investing inlong-term sustainable relationships with dairy farmers.