October 15, 2008

Concerns persist despite increased payouts for UK milk

A leading UK dairy processor will be increasing payouts for milk supplies from next month, but the problem of sustainable pricing for supplies is far from resolved.


Robert Wiseman dairies said starting from next month, farmers supplying milk to its operations will receive additional one pence for their products. This move follows a series of strikes by milk producers across the EU in 2008 over low milk prices. 


The move will boost confidence in the milk supply chain, according to Colin Telfer, chairman of the Wiseman Milk Partnership.


However, while welcoming this initiative, the dairy chairman of the National Farmers Union (NFU) said more must be done to protect supplies. He said farmers have been calling for price increases to cover costs and allow for reinvestment for months and the response given by Tesco, Milk Link and Wiseman gives encouraging signals that the industry is moving away from the harmful commodity pricing of the past and towards the more structured and collaborative supply chains.


Joop Kleibeuker, head of the European Dairy Association (EDA) said costs were likely to be more volatile as the dairy industry is now working towards a system where milk prices are determined by market developments.