The recent price increases announced by supermarkets and processors
were very welcome, but prices are only the tip of the iceberg when
it comes to the range of issues over which the dairy industry is
battling for its economic life.
Speaking yesterday (Tuesday) at the central London debate on milk
prices, hosted by the Women’s Institute, Mr David Curry, chairman
of Dairy UK, said that environmental concerns flowing from climate
change, increasing pressure on food manufacturers from a government
increasingly alarmed by the problems of obesity and a rapidly changing
consumer market place are changing the environment in which the industry
As milk buyers increasingly bought into processing farmers should
look to earn a return as shareholders as well as producers. The industry
itself had to pursue further rationalisation to generate the returns
for investment in the new products and to maintain the modernisation
of manufacturing capacity. Branded products – including liquid
milk – would grow in importance.
“However tempting it is for farmers to want to crawl back
into the womb of the Milk Marketing Board the fact is that innovation
and enterprise in this fast-moving and hugely competitive sector
will not be well served by a regulator.“ He commented.
“We already face increasing regulation on environmental matters
and the recent Ofcom decision to ban advertising of so-called “junk” foods
during children’s television suggests that we are heading the
same way on lifestyle issues.
“The industry- from retailer to processor- has shown that
it responds both to market signals and to consumer demand and these
are by far the most efficient “regulator” the industry
It was too soon to see if the recent price rises would stem the
exodus from the industry by farmers. “The market fundamentals
remain the same: it is a buyers’ market subject to pressure
from CAP reform and responding, ultimately, to commodity movements.
The price rises give a desperately needed boost to parts of the industry
but they should be seen as the first steps in putting the industry
back on a more sustainable footing.” said Mr Curry.
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