As milk processors in the UK begin to cut the price paid to dairy farmers for their milk, Scottish farmers say they are deeply disappointed that once again, dairy farmers have failed to receive a fair share of strong dairy markets.
NFU Scotland says World, European and UK dairy commodity prices have slipped back from historic highs but long term demand remains very healthy. However, the reaction from many UK milk buyers has been a cut in farmgate prices – either now or next month.
It added the frustration for Scottish dairy farmers stems from the long standing problem that the price paid to farmers for milk in the UK has been slow to react to the record wholesale markets but as soon as commodity prices start to weaken, processors clamour for price cuts
NFU Scotland’s Milk Policy Manager, George Jamieson said: “Armed with much better market information, farmers are well aware of the reasons why UK farm gate prices are under pressure, and that after a spell of price security, volatility has raised its head again.
“However, their frustration stems from the long standing problem that, once again, the price paid for milk in the UK has been slow to rise but as soon as commodity prices start to weaken, processors clamour for price cuts.
“Farmers can stand – and even accept the lows – if they were to receive their fair share of the highs. Farmgate prices have been good but should they have been higher or achieved sooner.
“The facts are that wholesale prices have once again risen faster and higher than farm gate prices, and when the pressure comes on, processors look to justify price cuts based on falling commodity values.
“The lag in price rises and the speed in implementing cuts simply underlines the need for proper pricing mechanisms across the sector and a robust and progressive voluntary code of practice to cover contractual arrangements between a dairy farmer and his milk buyer.”