Dairy Industry Must Become Profitable
US - Without a profitable industry to tempt youngsters in, there will be no dairy industry in the UK. This was the major concern raised by NFU Cymru Milk Board Chairman Mansel Raymond, who was guest speaker, at a Monmouthshire NFU Cymru County meeting.
24 May 2007
2 minute read
Mr Raymond addressed members on a variety of issues including the recently released report entitled ‘British Milk – What Price 2007?’, a joint NFU/RABDF report which examines the state of the British dairy industry.
The What Price report highlights the fact that the average cost of milk production has increased by 16.43% in the last four years and the average cost of production in 2006/07 was 21.32ppl, without taking account of essential business re-investment, whilst the average farmgate milk price in 2006/07 was 17.90ppl.
“The major retailers have got to realise that the present situation is unsustainable and unless we see an upturn in liquid milk price then many more producers are going to join the present exodus from the industry. Without a profitable industry we will not get the youngsters involved who are the lifeblood and future of the Welsh dairy industry,” said Mansel Raymond.
Mr Raymond went on to discuss the recent announcement by Tesco regarding milk price and their direct producer contracts, he said, “Some of the measures we discussed in the NFU vision document have been taken up by Tesco and whilst I fully support their pledge to increase farm gate milk price, the contracts on offer are only available to a limited number of producers. I would like to see all the major retailers follow suit and for the model to be used in the cheese sector which is especially important to Welsh producers.”
Steve Hart who represents Monmouthshire on the NFU Cymru Milk Board concluded, “The Milk Price report highlights what we have known all along – despite being among the most efficient milk producers in Europe our farmers are facing a bleak future. The gap between what farmers are paid for their milk compared to what it costs to produce it is widening.
“However, the report shows there is hope for this sector with strengthening markets, particularly for cheese, whey and milk powder, increased consumer demand and growing public concern on the ethics of food sourcing by retailers.
“The message is clear - we need to re-address the imbalance in the supply chain, increase the milk price at farmgate and above all give producers increased confidence to invest in the future of their business. If we fail to value our milk producers now we face losing them forever,” he concluded.
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