Blog: Katy AskewFarmers need long-term answer to "milk crisis"

Katy Askew | 18 August 2015

UK dairy farmers have been working to raise awareness of the low milk price, driven down by weakening global demand for dairy commodities. These efforts have met some success and farmers have gained the ear of the UK's retailers and regulators.

A number of the country's largest multiples are taking steps to increase the price farmers receive. Morrisons has launched a new brand that includes a premium for farmers in the price consumers pay for milk and cheese. Asda, Aldi and Lidl have all agreed to set a minimum milk price.

These short term initiatives might go some way to propping up struggling farmers. But are they enough to support a sector that is so exposed to the swings of volatile commodities markets?

A meeting to tackle this issue was held in London yesterday (17 August) between dairy stakeholders and government ministers.

According to industry body Dairy UK, the key takeaways from the event were that “transparency” in milk origin labelling – so UK suppliers can't be so easily undercut by foreign milk - as well as better branding needed to be part of the solution.

“After an open exchange of views, it was agreed that transparency in origin labelling and improved branding were important for consumers to be able to choose British products as easily as possible,” Dairy UK CEO Dr Judith Bryans said. “In the long term, we need a collaborative approach throughout the supply chain to develop a toolbox to handle the impact of volatility which, as we know, is now an inherent part of the milk market.”

The National Farmers' Union added that there is a need for “clarity on sourcing practices” to address the "milk crisis" and insisted that the government must support British farmers in its public procurement policy.

The farming union continued: “The Secretary of State [Liz Truss] and the devolved agricultural ministers have today acknowledged the threats facing the farming industry and the need for urgent action. Our farming members now expect to see these words followed up with visible, tangible actions. The ministers should be in no doubt that the time for talking is now over.”

An EU emergency summit will be held at the start of September to discuss how the crisis can be addressed at a European level. However, while a global imbalance between supply and demand for dairy products remains, so too will the downward pressure on farmer incomes.

Sectors: Dairy

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