Reacting to the results published today by Robert Wiseman Dairies, NFU Scotland has stressed that the UK’s major milk processors have a responsibility to work with farmers to secure a sustainable supply chain.

photo courtesy of www.jennifermackenzie.co.uk

Wiseman’s results record a 17.6 per cent drop in operating profits but a 14.7 per cent increase in turnover.

NFUS Milk Committee Chairman, Willie Lamont, said:

“We have milk processors and retailers obsessed with looking over their shoulders at their competitors and trying to snatch business off one and other. Wiseman says it is paying a significant premium over Arla and Dairy Crest, but a bad price is a bad price. Wiseman suppliers sit near the top of the price league table, but it is important to put that in perspective. With a Wiseman farmgate price of 19.6 pence per litre, against a cost of production at 19 pence, that means a net income of £6,000 for the average farm to support the family and reinvest in the business; and they are the lucky ones.

“The Wiseman statement today carries ominous phrases such as narrowing the gap with competitors and rebuilding margins. Rather than aligning themselves with those below them in the price table, these companies have a responsibility to the industry and their own shareholders to start moving the whole farmgate price structure upwards to secure the industry’s future.

“Wiseman’s statement today makes it pretty clear that it is not only farmers facing the retailer squeeze. The dairy industry in Scotland won’t survive this squeeze and companies like Wiseman, who are the ones sitting round the table with the retailers, need to drive home that message.

“When production costs at a processing or farmgate level increase, that must be passed up the chain. Wiseman and other processors talk of higher energy costs, but those are the exact costs that farmers are facing. The retail and processing sectors are dumping their increased costs onto farmers when they are struggling to pick up their own bills and that is not a viable situation.

“If Wiseman, Arla and Dairy Crest are genuinely committed to a sustainable supply chain, it is about time they got round the table with the major supermarkets and negotiated a price which doesn’t cut the throat of their farmer suppliers.”

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