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New Intervention Prices and Dairy Futures Way Forward

05 March 2015

UK - An immediate review of intervention prices by the European Commission and the development of futures markets are two of the main recommendations from the Dairy All Party Parliamentary Group.

In a report, The Sustainable Competitiveness of the UK Dairy Industry, released on Tuesday in the House of Commons, the Dairy APPG also called for the development of export opportunities and mandatory country of origin labelling for dairy products.

The report hits out at the misconceptions surrounding the dairy industry and its products and calls for the promotion of the economic and nutritional benefits of dairy products.

Speaking at the launch of the report chairman of the Dairy APPG Neil Parish said that the sector had seen turmoil in the recent past with fluctuating prices but he said that he could see “green shoots” of a recovery and a brighter future.

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Volatility and hard times have been a feature over recent years: Neil Parish, Dairy APPC Chairman

However, he called for more to be done to assist in trade and exports and pointed to the Far East and China as the potential for future exports.

He added that the sector was also looking to the Grocery Codes Adjudicator to assist the sector along the supply chain.

“The dairy industry has been facing difficult times for a few months and therefore it was appropriate for the APPG to conduct a thorough enquiry on how to ensure that the British dairy industry remains sustainable and competitive in the future.

“Volatility has been an inherent feature of the dairy market for a number of years and it is one of the greatest challenges facing the dairy industry.

“Therefore, it is vital that the whole supply chain works together to try to mitigate volatility as efficiently as possible.

“The extreme volatility seen over the last few months is affecting the whole supply chain but the industry is confident of an upturn during the course of the year.” 

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Futures have worked in the US dairy market, said Farming Minister George Eustice

Farming minister George Eustice said: “This report sees through the short-term gloom and sees the future potential for the industry.

“The last two years have been a rollercoaster ride for the industry.”

And he added: “Volatility is something we have got to manage.”

He said that the benefits of a futures market for dairy produce was seen in the US where when quotas were abolished it was introduced and many farmers hedged 40 per cent of their prices on the futures markets and let the remaining 60 per cent float on the market.

He added that there was a need to change the perception of dairy produce and to emphasise the health benefits.

He also called for promotion of value added dairy produce on overseas markets and backed the call for country of origin labelling for dairy products.

Billy Keane, chairman of Dairy UK said: “Collaborative work throughout the dairy supply chain will be key to ensuring a sustainable and competitive future for British dairy.”

He added: “A sustainable industry is one that balances a number of concerns, such as profitability, productivity and environmental issues and, therefore, we hope the finding of this report will help Parliament and Government to support the future of the British dairy industry.”

Neil Parish MP is pictru4d above with farming minister George Eustice at the report launch.

Chris Harris

Chris Harris



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