Milk Price Lags Short-Change Welsh Rural Economy

WALES, UK - The Welsh rural economy is being short-changed by a massive £220,000 a day because milk buyers are failing to pass back the full value of improved market returns to Welsh milk producers, according to the National Farmers' Union Welsh Branch, NFU Cymru.
calendar icon 25 October 2016
clock icon 2 minute read

Speaking before the Welsh Dairy Show in Carmarthen, Aled Jones, NFU Cymru Milk Board Chairman, said: “The most recent AHDB figures for farmgate milk prices show average milk price across the UK at 21.34ppl - in reality, with the scarcity of retailer aligned contracts in Wales, average milk price in Wales will probably be running 1-2ppl below that. This is in stark contrast to market indicators that suggest milk price should be moving towards 25-30ppl."

After an extremely turbulent two years on global commodity markets recent months have seen market returns pick up significantly for dairy products. But the Union said most milk buyers are slow to pass these price rises back to Welsh dairy farmers, many of whom are continuing to produce milk at well below the cost of production.

“If we take a conservative estimate of the average Welsh milk producer price lagging at 5ppl behind what it should be, that means the Welsh rural economy is losing out on a massive £220,000 a day, or £6.7 million a month, from a failure of milk buyers to fully pass price increases to Welsh dairy producers," said Mr Jones.

“This money is vital not just for farmers, but to the agricultural merchants, vet practices, machinery dealers, builders, electricians, plumbers, accountants and others who rely on dairy farmers for a significant part of their income and who, as a result of cash flow problems on dairy farmers, have also suffered through this dairy downturn.”

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