August 27 2014 Latest news:
By MICHAEL POLLITT, Agricultural editor
Saturday, July 28, 2012
Dairy farmers will keep up the pressure for a fairer milk price as two co-ops dropped proposed for cuts from August 1.
Farm co-op First Milk, said that it had withdrawn its planned cut and this was followed by Dairy Crest, which announced a two-month stay of execution on its 1.65ppl price reduction until October.
Yesterday, Robert Wiseman Dairy, owned by German company Müller, scrapped its planned milk price of 1.7p per litre, leaving its price to dairy farmers at 26.43ppl.
South Norfolk producer William Cole, of Winfarthing, near Diss, welcomed Dairy Crest’s proposal but emphasised that the original 2p litre cut from May was already having a huge impact on the business.
“In June, the 2p cut cost him £3,000. “I’m not going to get that back,” said Mr Cole, who milks 220 cows.
“If they took the extra 1.65p per litre, it would cost us £70,000 a year,” he added.
With the cost of animal feed prices soaring, said Mid-Norfolk milk producer William Brigham, the pressure on dairy farmers will be even more acute.
The price of one key dairy ration ingredient, soya, has hit £440 per tonne this week or a £130 rise from earlier this year. The impact of the wettest summer for years and also the price in May has led to many producers facing losses of least £50,000 in the coming year.
Mr Brigham, who is a former chairman of Norfolk National Farmers’ Union, said that any move on the producers’ base price – currently about 25p per litre – has to be good news.
“The base price is totally unsustainable,” he added.
The dairy coalition has argued, with increasing success, that a large number of dairy farmers would be paid at least 5p less that the current industry agreed production cost of about 29p per litre.
And a respected industry body, Kite Consulting, has warned that average farmgate production costs will rise to at least 31p per litre by October – as the impact of factors including the wettest summer for years and higher animal feed prices are felt.
NFU President Peter Kendall said: “Farmers, their families and shoppers have supported this campaign to see a fair price paid to our dairy farmers. It has been an amazing show of strength and support.
“I’m really pleased that farmer co-op First Milk has shown huge leadership and resolve in sticking its neck out and announcing it will rescind its planned milk price cuts from August 1.
“Dairy Crest has followed by announcing a deferral of its planned cuts although it’s important to see this made permanent.
“There has been some fantastic work by a number of organisations and individuals on this issue in the past two weeks but we can’t – and won’t – take our eye off the ball.
“We are calling for the retailers Iceland and Farmfoods to ensure they start to pay a price to their milk suppliers that covers the cost of production.
“I believe only with all areas of the supply chain playing their part can we turn this situation around.
“I am committed to ensuring our dairy farmers have a secure future and we will continue to work extremely hard on the challenges that lie ahead.”
A Norwich-based business which started as a “man with a van” operation is eyeing further expansion after seeing its predicted turnover increase from £6,000 to £340,000 within five years.