UK dairy farmers are preparing to protest peacefully over the unilateral producer price cuts they have suffered this summer for their milk. As promised on Wednesday last week, disruption will be maximised for processors and retailers who do not recognise that milk producers need to be able to earn a fair price for their output. At present producers face losses of 5p (EUR 0.063) and more per litre if cuts scheduled for August 1 take effect.
In a bid to placate the farmers, on 17th July UK retailer ASDA announced an increase in the premiums paid to 272 dedicated Dairylink from 1p/litre to 3p/litre, bringing the total price to 27.5p/litre. However, it falls short of the 30p or more milk costs to produce in the UK. The multiple’s decision to offer increased bonus payments also diverts attention from an inadequate base price.
Farmers For Action (FFA) chairman Dave Handley slammed ASDA for its sham gesture: “…when you reach cost of production price then we can start talking,” he wrote on his website. “It just goes to show the money required by farmers is in the supply chain. Following a small amount of pressure, Asda magically finds 2p/litre.”
Arla Foods has invested in additional buttermaking capacity at Westbury, in Wiltshire. In its statement, Asda said that it will be sourcing British butter from this site, as if that was going to earn any more for producers who have already sold their milk at a loss.
The National Farmers’ Union (NFU) has put downloadable poster designs on its website at http://www.nfuonline.com/News/Get-the-message-across–Dairy-posters/. As of Tuesday, these designs had been downloaded over 18,000 times. Newspaper Farmers Weekly has also launched a poster campaign.
In an open letter, NFU president Peter Kendall wrote: “…the NFU is completely behind more peaceful protests which highlight the crisis facing many dairy farmers in Britain… These demonstrations have huge impact. No retailer enjoys being shamed in this way on their own doorstep.”
The NFU is meeting Arla management in Denmark later this week and has already met a number of UK retailers, notably Tesco, Morrisons, the Cooperative and Sainsbury. The union is contacting discounters and major industrial milk users this week, setting out its demands for the restoration of producer prices.
Kendall added: “Asda’s announcement that it will ensure that the planned price cut won’t impact on its direct suppliers is welcome, but still leaves the price below the cost of production and is not enough.”