Dairy Crests decision to cut milk prices is notgood news but putting a floor in the market will give farmers some stability ina very difficult cheese market, the NFU said this week.
The comments come after the dairy company said itwould hold its price for standard liquid contracts for December and reduce itsDavidstow milk price but introduce a price floor until the end of February.
NFU dairy board chairman Rob Harrison said: Thisannouncement by Dairy Crest which follows a similar move by Arla in holdingits liquid milk price for November shows some sort of stability within themarket. With the winter period upon us and production costs increasing ascattle are housed, its good to see prices start to firm, albeit at a levelthats far too low to support a sustainable dairy industry.
While we understand that the cheese market remainsvery difficult, this price cut will be devastating for affected members, butDairy Crest has provided some stability to farmers by putting a floor in themarket until the end of February. This shows the benefit of having strongproducer representation, in Dairy Crest Direct, who proposed the idea for amarket floor to Dairy Crest management.
Weve seen some moves at retail to better supportmilk for cheese, both in improved sourcing and pricing, but unfortunately theseremain in the minority. UK retailers and other end users need to have athorough look at their cheese sourcing policies to ensure that they are payinga fair, transparent price.
A number of other milk buyers have announced pricecuts for November and December. Processors need to clearly explain to farmerswhy this is the case and assure their suppliers that everything is being doneto add value into the dairy market.