Dairy processor Lactalis has served notice 'without warning' on 12 of its Scottish dairy farmer suppliers, with NFU Scotland expressing anger at the decision.
The processor's decision, whose headquarters are in France, will affect 12 producers – ten in Dumfries and Galloway and two in Ayrshire.
The farmers have been given 12 months' notice, something NFU Scotland said was without 'clear reasoning'.
According to Lactalis, the decision has been taken following a business review of its milk supply in south west Scotland.
Milk is provided to Lactalis and its creamery in Stranraer by the Milk Suppliers Association (MSA), a co-op of farmers supplying 210m litres of milk per annum to Lactalis.
NFU Scotland has asked for a meeting with both Lactalis and MSA to get 'a full explanation' of the decision.
The union has also urged affected farmers to reach out to the union or the Scottish Dairy Hub for support and assistance.
It follows the Tesco Sustainable Dairy Group confirming that it will reduce the number of Scottish farmers directly supplying the retailer for its own label fresh milk.
NFU Scotland vice president, Andrew Connon said: “Once again, it appears as though producers are to be dumped out of their current contract without clear reasoning and with few options to find alternatives in the current market.
“How can any milk producer invest, plan, and have confidence in what they are doing if they can be dropped on a whim should their milk purchaser perceive them as being awkward to deal with, geographically challenging to service or producing milk of unsatisfactory volume?"
Mr Connon called for 'clear protocols' built into contracts that protect a producer when a processor faces a challenging market for its products.
Without greater protection for producers in contracts, this would "continue to happen, allowing processors to squeeze out some suppliers in favour of others".
“Why would anyone push to keep up with multi-decade investments when confidence in contracts only extends to 12 months?" he asked.
"Dairy is largely an unsupported sector, with no grant schemes in Scotland supporting investment, resulting in all improvements to meet market demand coming from private investment.
“There must be greater protection for dairy farmers, which reinforces NFU Scotland’s position on the importance of the new milk contract legislation coming into force.”
