Retailers to pay more for milk

Pressure is mounting on retailers who have started to offer to buy milk from processors at an increased price but it is unclear how much this will impact on the price paid by processors to farmers.

ASDA has committed to paying 28p/litre to their milk supplier Arla although because Arla is a co-operative I believe the increase in price will be pooled across all 13,500 farmer members throughout Europe, not just British farmers which would dilute the benefit of this rise here in the UK.

NFU president Meurig Raymond said: “The NFU has been lobbying tirelessly for Asda to recognise the plight of the dairy industry so we are pleased that Asda has moved to support farmers in their hour of need.

“It is clear from Asda that this commitment is to support the UK dairy industry at a time of crisis. It is now important that Arla ensures this is delivered to British farmers on the ground, with immediate effect.

Aldi and Lidl have also made new commitments to pay processors 28p/litre while Morrisons will pay 26p/litre for milk before processing costs.

The Morrisons move followed the retailer’s previous announcement that it was preparing to launch this new brand giving customers the option to pay an extra 10p/litre more for it on the basis the extra 10p/litre would go back to the farm.

Again the detail as to how these new pricing plans will work is not entirely clear. But it is certain that the pressure put on retailers by farmers taking direct action and by talks behind the scenes between farming leaders in the NFU and other organisations is having some effect on the liquid milk market at least.


However, liquid milk is only one part of the dairy market. About half the milk produced in this country is processed into other products such as butter and cheese and farmers supplying milk to cheese processors for example will be unaffected by these developments.

So there is much more work to be done to help our dairy farmers across all sectors but there is no magic bullet which can insulate UK dairy farmers from the disastrously low world dairy commodity markets which are showing no sign of improvement.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk