Pass rises to dairy farmers - NFU

DAIRY farmers yesterday insisted that any increases in the price of dairy products in the shops should be passed on to them.

DAIRY farmers yesterday insisted that any increases in the price of dairy products in the shops should be passed on to them.

cows

Industry experts have warned that the price of milk and cheese may go up because milk yields have fallen because of the severe wet weather experienced this summer.

But farmers say that the extensive rain has added to their costs – with many forced to bring their cows inside because the fields are waterlogged. This has meant extra feeding and bedding costs.

And farmers whose winter animal feed is already running low will have to pay more to replace it because of rising grain costs.

Asda has already announced that it is to raise First Milk’s cheese price by £400/tonne, prompting the NFU to call on milk buyers and retailers to deliver an immediate and significant increase in raw milk prices.

NFU North-West’s dairy board chairman Mike Taylor said: “The cheap food era is over. Conditions so far this summer have been disastrous for many dairy farmers, not just those in the Midlands who have been affected by floods, but farmers in the North-West as well, who have been forced to house cattle, use valuable stocks of silage and now face massive feed bills going into the winter.

“The weather has been totally demoralising and has nipped any recovery in confidence that should have occurred with rising dairy markets well in the bud.

“The industry has been muddling through these last few difficult weeks, but something has to give.

“First Milk announced that it has been forced to invoke force majeure clauses in its supply contracts as a result of the recent extreme weather and spiralling rises in farm production costs.

“The only way to avert a severe reduction in volumes is for the supply chain to deliver an immediate and significant price increase to dairy farmers. I welcome Asda’s move as a significant first step, but this must be followed by other supermarkets and must extend into all other dairy categories.

“With commodity markets continuing to climb vertically there is no reason why the industry cannot pull together to inject the confidence and cash that dairy farmers need to see  them through.”

The combination of a dip in supply and increased production costs is likely to mean higher shop prices, according to Dairy UK.

The cross-industry body’s director general, Jim Begg, said rising global demand for milk and dairy products was also putting pressure on supplies.

“These are all pressures which we would expect to see reflected in higher retail prices.

“It is happening all around Europe, not just the UK,” he said.

Mr Begg could not put a figure on the anticipated price increase because this will be up to the retailers.

He said consumers were unlikely to see less milk in shops because any supply shortage would instead affect longer-life products made with milk.

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