RABDF supports industry ‘coalition’ bid for immediate reversal to farm gate milk price cuts (From Smallholder)

RABDF supports industry ‘coalition’ bid for immediate reversal to farm gate milk price cuts

4:00pm Friday 13th July 2012 in Livestock

The Royal Association of British Dairy Farmers has joined forces with the other farmer organisations calling for a reversal of the farm gate milk price cuts before 1 August in order to help establish a fair return for all producers.

“ In London the dairy farming industry demonstrated unity and RABDF is pleased to be part of the coalition of organisations which is committed to doing all it can to reverse the recent cuts,” RABDF vice chairman, Ian Macalpine said immediately after the milk crisis meeting attended by more than 2,500 producers.

"These milk price cuts show palpably that the hard pressed dairy farmer is the one being most penalised, while supermarket margins continue to rise – up from 5.2% in 1996 to a current 29%. That in a nutshell is the problem. The average cost of on farm milk production is now generally accepted at around 30ppl. Those farmers with a dedicated supply to some retailers receive less than 1ppl more than the cost of production. However, recent savage price cuts have left other producers receiving only 25ppl, that’s 5ppl less than the average production cost. At the same time retailers are insisting on margins of 15ppl to 20ppl,” he explained.

“I believe that it is unacceptable that producers bare all the costs in the dairy supply chain, be it lost returns from cream, higher fuel costs or increased plastic costs. There should be a method of pushing costs up the chain as well as down.

“RABDF fully supports the need for a grocery adjudicator and our view is that unless this is put in place with real teeth then this inequality throughout the dairy supply chain will continue. We must never forget that the consumer rules in this market place and thus we are delighted that our invitation to the WI to attend this event has been warmly accepted. We do not believe the consumer would wish to export our dairy industry as it will have a drastic economic, social and environmental impact. The number of UK dairy farmers has literally halved since 2000 to a current 14,500.” He added: “Both farmer and processor attempts to reduce costs and demonstrate excellence and efficiency in the industry are continually undermined by retailer price pressure as all the benefits of efficiency are being eroded by retailer price control. We support the view that the recent price cuts should be reversed, however in the long term we cannot keep returning to this crisis situation and we believe all those involved in the dairy industry should together work out a better way to do business.”

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