The continuing shortage of milk in the market place means conditions are ripe for further price rises to producers, says the NFU.

Milk production has declined at a rate of more than 7% in recent weeks due to poor quality forage and the continuing forced exodus of producers from the industry.

While many producers have received the minimum 2 pence per litre milk price increase predicted in the NFU document British Milk – What Price?, published in September, they are still only receiving about 18ppl.

This is not enough to cover the increased costs of fuel, compound feeds and fertilisers, says the NFU.

NFU Milk and Dairy Produce Committee Chairman Terrig Morgan said: “The increased prices we have seen so far will certainly not put the majority of producers back in profit, let alone allow them to reinvest for the future.

“Producers need a bare minimum of 21ppl to cover costs and, in my view, at least 24ppl to ensure a viable sustainable industry.

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“We said in British Milk – What Price? that if market factors continued as they were there must be further milk price increases.

“Not only have the market factors remained buoyant but we have a continuing and accelerating decline in milk production which could mean a significant shortage of milk to processors.

“We know that this is already affecting prices on the spot market where prices of up to 30ppl have been reported and secondary markets are equally buoyant.

“The market conditions are now ripe and it is about time that producers received the full benefits of them.”