Many farming businesses are increasingly under threat from an ever growing competitive retail environment, NFU members were told at a recent meeting.
Glyn Davies, MP for Montgomeryshire, was told that depending on the milk buyer, some producers have seen up to 11ppl knocked off their price in less than 12 months.
"The consequences are to be seen far and wide," said NFU Cymru County Chairman, Jonathan Wilkinson.
"With devastating milk price cuts at farm gate level, the short-term fortunes of dairy production continues to fall.
"The latest cuts by some milk buyers in the New Year will be critical and we've already seen earlier this month a dramatic announcement from farmer co-operative First Milk and its inability to pay its farmers for their milk on time."
The NFU meets with Environment Secretary Liz Truss, it has also given evidence to the EFRA Select Committee and speaks regularly with local government.
Wilkinson said the union was 'quite clear' in its view that government must help on issues such as taxation, contractual transparency, labelling and maximising public procurement of British produce.
“We have also pressed home very forcefully the case for labelling on packaging to be clearer, to help consumers support British and make informed choices, and that UK Government support was essential to help persuade the EU Commission to support the export of UK dairy products to third countries to increase market opportunities.
“All of these things will help but we need Government support. What is obvious though at this point in time is the continued aggressive price discounting of milk on the shelves of retailers cannot continue. It is seriously under valuing the product that we produce. The time, effort and investment that we as farmers put in tirelessly, every day all year round, to produce a high quality product must be reflected.
“Poor returns on commodity prices worldwide are one thing but it coincides with a fiercely competitive retail environment here in the UK. At the retail level, liquid milk prices continue to be cut with leading retailers competing for market share. Arguably the biggest question mark hanging over the industry is where does this all stop?
“Let’s not hide the facts. Even though some retailers have pricing structures in place for their dedicated suppliers, by far not all of them do and retailers have to be wary of the signals they’re sending to the industry through their pricing tactics on dairy.
“The reality is that one retailer is now selling four pints of milk for just 75p. In the past 14 years the average retail milk price has never been that low. Farmers will be wary of the last time retail prices really plummeted when in the four months between June and October of 2010 the average retail price for four pints fell from £1.51 to just £1. Currently the average is holding at 113p. Farming didn’t instigate this price war, yet we’re seeing our dairy products on the front line and it’s our dairy farming members who are the casualties.
“Ultimately, do retailers see UK dairy products as a battle ground in a price war or as a valuable category that can thrive and prosper?”
“With the health and nutrition benefits that come hand in hand with a glass of milk, isn’t it obvious that this is a sector and product that should be valued, where milk is priced fairly, with pricing mechanisms that reflect the quality it offers and ensures a fair and rewarding living to those who work tirelessly to produce it every day all year round.
“After all, a bowl of corn flakes every morning simply wouldn’t taste as good without fresh milk on top now would it…?”
