16 November 2006

2 minute read

Europe

However, the same cannot be said of the price of milk and that was reflected in the large number of producers who attended a seminar where the future of this sector was most firmly under the microscope. Jim McLaren, vice-president of NFU Scotland, set the tone in his opening remarks.
He said: "Our strategy has two strands. Firstly, greater ownership of processing gives us a bigger clout in the market place. But secondly, and critically, we must ensure that ownership of that processing capacity is used to best effect."
Disaffection with milk buyers is at a high level and recently a group of farmers declared that unless they received a higher price for their milk, they would start invoicing dairy companies.
McLaren thinks this is the wrong route to pursue. He said: "At the very best nothing will happen and the very worst possibility is that the buyers will decide not to uplift milk from some farmers. There has to be a better way."
That was certainly the line of thought detailed by Ken Boyns, the chief economist with the Milk Development Council, an organisation funded jointly by producers and the trade.
He said: "There is no easy or quick solution. We have seen 43% of the UK's dairy farmers give up over the last decade, but there has only been a relatively modest overall drop in production.
"Many farmers are undoubtedly losing money, but the fact is that the variation in the cost of production between the most efficient and the average is at least 3p per litre, while those at the bottom end of the scale are at a disadvantage of as much as 6p per litre."
The most efficient prod-ucers have gone just about as far as they can in honing their management skills. But Boyns believes the solution and the route to a more profitable industry lies further up the chain.

Source: theherald.co.uk