The NFU is calling on Müller to explain the reasons behind its September milk price hold and not increasing it in line with extremely positive market signals for UK milk prices to its suppliers.
Müller yesterday (1st August) held steady on its base price for September at 18.66ppl for its Muller Milk Group and 18ppl for the Direct Milk group.
NFU dairy board chairman Michael Oakes said that Müller’s non-aligned suppliers – estimated at around a third of its 1,900 farmer suppliers – would be frustrated that they were not seeing the benefits of a market that was starting to experience positive price movements after two years of downturn.
“We have heard Müller state at various conferences this year that it wants to be the biggest and best milk buyer in the UK but this latest milk price news beggars belief. Yes, its farmgate milk price remains competitive but this is only due to the continuing support of retailers with their minimum farmgate pricing mechanism, currently paying around 3ppl,” he added.
“Müller’s non-aligned suppliers will no doubt be dumbfounded by Müller’s decision to hold. The decision is an insult to its suppliers and is completely out of line with recent positive market movements which are bringing some confidence to the industry at last.
“I’m sincerely hoping that Müller isn’t hiding behind the retail supplements paid by Lidl, Aldi and Morrisons, rather than reacting to the market realities we are seeing in cream incomes, wholesale prices and volume reductions. Cream incomes to a liquid retailer have increased by a whopping 77% since Müller last increased its base price and current daily deliveries of milk are down 10.2% on this time last year. This stand on milk price also makes a mockery of the support retailers gave, and continue to give, dairy farmers in minimum farmgate pricing.
“And the impact is wider than Müller suppliers – the Müller base price is frequently used in the unacceptable practice of basket pricing – where other processors pay their suppliers based on an average basket pricing mechanism – regardless of whether the end markets are the same.
“Müller is throwing its support to the British team at this year’s Olympics and it’s about time it showed similar support to its non-aligned farmers who deserve improved milk prices.”
Mr Oakes also said that milk buyers, more generally, were now starting to recruit new farmers, but urged them to take time and consideration in reading and understanding any new milk contracts offered.
“While headline prices may seem attractive, these can be changed in many cases at a whim, while farmers can be locked in to unbalanced contracts for long notice periods,” he added.