Many dairy farmers are yet again feeling frustrated that they do not seem to be receiving a fair share of the profit which is being generated from the milk they produce as a consequence of the high world market prices for milk products.
As a result “Farmers for action” (FFA) held a blockade on 5th September at the Morrisons supermarket distribution centre near the Bridgwater junction on the M5. About 100 farmers were involved and FFA chairman, David Handley handed over a letter addressed to Morrisons’ chief executive explaining why the farmers felt the need to act.
Mr Handley explained that, "The reason that farming families had turned up was very simple; most dairy farmers over the past three months have seen no milk price increases despite the fact that global markets are at an all time high. Last year, it was agreed by all parties in the dairy chain that dairy farmers who have to take the lows in the market place should also benefit from the highs."
FFA is demanding that major processors and supermarkets work together to raise the milk price to a minimum of 33p/litre, but preferably 35p/litre across the board so farmers can make a "bit of profit". FFA estimate the average price being paid to farmers for their milk is 31p/litre but some are receiving as little as 27-28p/litre at which level they will be making significant losses.
A Morrisons spokesman said: "We buy the milk sold in our stores directly from a processor, who sets the price received by the farmer for each litre they produce. The increases we have made in the amount we pay to processors since last summer have resulted in a rise of more than 4p/litre for farmers, bringing milk prices to their highest level in recent years."
This is indeed true but even at these high prices farmers are only receiving a milk price which is equivalent to that which they were receiving in 1992 if inflation is taken in to account. I think it is generally agreed by independent analysts that the increase in world commodity prices has not been properly reflected in the price farmers are receiving, but there is disagreement as to how best a fair increase can be achieved.
The NFU for example is not supporting the protests because they think the matter is best dealt with by negotiation between processors, supermarkets and farmers. As far as I can see, one of the difficulties is that because there are so many different contracts offered by the various milk purchasers, it is difficult to get to the bottom of what is really happening. For instance Dairy Crest announced last week that its “formula contract “price is set to increase by 0.153p/litre to 32.082p/litre from 1 October which will be 0.693p/litre ahead of their standard liquid milk price.
As a result “Farmers for action” (FFA) held a blockade on 5th September at the Morrisons supermarket distribution centre near the Bridgwater junction on the M5. About 100 farmers were involved and FFA chairman, David Handley handed over a letter addressed to Morrisons’ chief executive explaining why the farmers felt the need to act.
Mr Handley explained that, "The reason that farming families had turned up was very simple; most dairy farmers over the past three months have seen no milk price increases despite the fact that global markets are at an all time high. Last year, it was agreed by all parties in the dairy chain that dairy farmers who have to take the lows in the market place should also benefit from the highs."
FFA is demanding that major processors and supermarkets work together to raise the milk price to a minimum of 33p/litre, but preferably 35p/litre across the board so farmers can make a "bit of profit". FFA estimate the average price being paid to farmers for their milk is 31p/litre but some are receiving as little as 27-28p/litre at which level they will be making significant losses.
A Morrisons spokesman said: "We buy the milk sold in our stores directly from a processor, who sets the price received by the farmer for each litre they produce. The increases we have made in the amount we pay to processors since last summer have resulted in a rise of more than 4p/litre for farmers, bringing milk prices to their highest level in recent years."
This is indeed true but even at these high prices farmers are only receiving a milk price which is equivalent to that which they were receiving in 1992 if inflation is taken in to account. I think it is generally agreed by independent analysts that the increase in world commodity prices has not been properly reflected in the price farmers are receiving, but there is disagreement as to how best a fair increase can be achieved.
The NFU for example is not supporting the protests because they think the matter is best dealt with by negotiation between processors, supermarkets and farmers. As far as I can see, one of the difficulties is that because there are so many different contracts offered by the various milk purchasers, it is difficult to get to the bottom of what is really happening. For instance Dairy Crest announced last week that its “formula contract “price is set to increase by 0.153p/litre to 32.082p/litre from 1 October which will be 0.693p/litre ahead of their standard liquid milk price.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
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