NFU Scotland believes the case for a milk price rise for producers
has been strengthened, following a First Milk report which highlights
that cost of production increases have more than outweighed any
farmgate price increases seen over recent months.
The report, entitled The Real Price of Milk, which was
published today (Monday) was commissioned by the farmer-owned dairy
business First Milk. It highlights the precarious condition of
British dairy farming and calls for a ‘fair trade’ price
to be paid to farmers for their milk, after a decade in which they
have been forced to sell at a price well below the real cost of
The report details the rising production costs facing dairy farmers
and asserts that they need to be paid a price of at least 29.64
pence per litre (ppl) in order to be able to reinvest in their
businesses and secure a viable future. The report estimates current
production costs at 26.64ppl and yet in 2006/7, the average price
paid to producers was just 17.4ppl.
The global demand for dairy products has contributed to milk price
rises over recent months but the report highlights that all of
these price increases have been cancelled out by rapidly increasing
Willie Lamont, NFU Scotland Milk Committee Chairman, said:
“This is a very informative and helpful report.
“For a number of years now, dairy producers have been experiencing
prices which are simply unsustainable and which are all too often
exceeded by costs of production.
“As a result, we have seen many hundred dairy farmers leave
the industry because they couldn’t afford to keep going,
let alone reinvest for the future.
“About a year ago, we thought that our fortunes were beginning
to change and milk prices started to rise. However, these increases
have now been swallowed up by increased costs brought about by
enormous feed, fertiliser and fuel bills, which will only continue
to rise. Family labour must also be considered when looking at
“There is no room for complacency within the milk supply
chain. We are now back in the position of needing a substantial
price increase in order to be able to survive and reinvest.
“‘Fair trade’ is a term that is often used too
flippantly, but it is exactly what is now required. Farmers, regardless
of where in the world they live and work, require fair reward for
what they produce.
“The report clearly sets out what processors and retailers
must deliver in order to secure a sustainable dairy industry in
this country. They must act now if they don’t want to suffer
a milk shortage once again.”
· The full First Milk report can be viewed here
Average farmgate milk price in December 2007 was
26.60ppl*. This is 3.04ppl lower than the report claims is essential
for producers to reinvest in their businesses.
* Milk Development Council figures
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