Milk Leaders Urge Producers to Strengthen Position

Milk Leaders Urge Producers to Strengthen Position
11/09/07

Dairy farmers are ideally placed to strengthen their position in the dairy supply chain according to a group representing UK producers, who were visiting Dumfries and Galloway last week.

The group, which included officeholders and staff of NFU Scotland, NFU England and Wales and Ulster Farmers’ Union, took in Rowan Glen, Scotland’s largest yoghurt factory at Newton Stewart and visited the SAC’s Centre for Dairy Excellence at Crichton Royal Farm, Dumfries.

Speaking after the event, NFU Scotland Vice-President Stewart Wood said:

“Top of our agenda was how producers can use the undoubted strength in the market place to best advantage. The medium term outlook for the dairy market is positive and dairy farmers can look ahead to more optimistic times. However, this must not breed complacency. The industry must continue to consolidate, secure its competitiveness and, like Rowan Glen, seek to innovate and add greater value to its products.

“This optimism is tempered by the production cost figures presented to the group by our hosts, SAC. These point to feed costs increasing by £50 per tonne, fertiliser costs up by £30 per tonne and fuel and interest costs also on the rise. The reality is that costs to milk producers have already risen by 2 to 3p per litre, before factoring in lower Single Farm Payments and inflation.”

Gwyn Jones, Chairman of the NFU Dairy Committee added:

“As a result, every milk producer still needs to see ongoing improvement in milk returns in order to exceed their increase in costs. Market conditions and ongoing production and regulatory costs mean that farmgate prices must and will continue to improve, providing a solid base for producers themselves to draw some breath and help prepare for the significant challenges that lie ahead especially in terms of environmental regulation.”

Commenting on the developing market situation, Jackson Wright, Chairman of the UFU Dairy Committee said:

“While further milk price increases are on the cards, producers also need to give some consideration now as to how they protect themselves and guarantee some stability should markets change in the future. With the EU Commission appearing eager to remove any remaining market support instruments for the dairy sector over the coming years of CAP reform, now is the time for serious discussion about managing price volatility and ensuring a stable and sustainable return for UK dairy farmers.”

Representatives of NFU Scotland, NFU England and Wales and Ulster Farmers Union visited South-west Scotland on 6/7 September 2007. The visit included a tour of Dale Farm’s Rowan Glen factory near Newton Stewart and a visit to the SAC’s Centre for Dairy Excellence at Crichton Royal Farm, Dumfries.

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