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Stackyard News Aug 05

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Anger as up to 90% of milk price rise 'goes missing'

    Price Cut Only Adds To Dairy Farmers' Anger

The anger and frustration of Scotland's dairy producers, who have been involved in blockades of milk supplies in recent weeks, will only be exacerbated by today's announcement of a price cut by Robert Wiseman Dairies, according to NFU Scotland.

Whilst recognising that Wiseman continues to pay the highest price to farmers, NFUS has highlighted that the price still remains at an unsustainable level and the continued price war amongst supermarkets and processors must come to an end if Scotland's family dairy farms are to continue to produce milk.

NFUS President John Kinnaird said:

"Another day, another statement announcing a price cut that, in terms of market signals, simply cannot be justified. Whilst Wiseman is still paying the highest price, it barely scrapes above break-even for most producers. It is also another statement which adds to the downward spiral and yet calls for the price cuts to end. Is it beyond reason that a processor could call for an end to the price cuts without announcing one at the same time?

"Scotland's dairy farms have improved efficiency and managed production yet are trapped in a system which is screwing them into the ground. Processors continue to jockey for position and rip market share away from each other. All the while the supermarkets sit back, pick off the cheapest and enjoy their 8-10 pence profit on every litre.

"It now appears that most of the 1.5 pence due to reach farmers as a result of the retailer price rise never got past the processors. We can only speculate that they either used it to maintain their margin or they simply handed it back to the retailers in the final contract negotiations. Whilst supermarkets point the finger of blame at processors, they have a responsibility to their customers and shareholders to secure future supplies

"It will be no surprise to see dairy farmers on the streets again this week and who can blame them? It is particularly galling to hear the processors claiming they have to make price cuts to avoid committing commercial suicide; both they and the supermarkets are doing that anyway by negotiating contracts at prices which drive farmers out of business."

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NFU Scotland