Farmers in new milk price blow

Dairy farmers will receive 29p per litre – a fall of 1.8p – for the milk they provide from October, the Market Drayton-based dairy has announced.

Campaign group Farmers For Action (FFA) fear it could see the industry face similar problems to two years ago when farmers faced bankruptcy and staged a series of protests.

Farmers, who were receiving about 26 to 28p at the time, took part in a series of protests outside Muller Wiseman's plant.

See also: Farmers blamed for fall in milk prices.

The dairy firm said the current cut reflects a sustained decline in revenues from sales of butter and cream, commodities which are traded in global markets.

David Handley, chairman of FFA, said current production costs of milk are about 27p per litre.

"This isn't good news and is worrying a lot of farmers," he said.

"Prices of below 25p could mean bankruptcy for a lot of people."

He added: "They have blamed it on a downturn in global markets, but a lot of our milk is sold domestically and is not sold in global markets.

"I don't think it will be long before people see us out and about again protesting."

Roddy Catto, chairman of the Muller Wiseman Milk Group, which represents dairy farmers who supply Muller said: "While we are disappointed with the scale of the reduction in milk price, the board and the company debated hard to come to an agreement with both sides moving a considerable amount following lengthy discussions.

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"Unfortunately, it is a reality that milk supply hasn't eased and markets are in free fall. As a board we will continue to work with the company to have constructive dialogue and understanding that neither the board nor the company like the volatility of the market we find ourselves in."

Oliver Cartwright, NFU Shropshire spokesman, said: "We had hoped the price would stay above 30ppl, so of course it is very disappointing to see Shropshire farmers taking the hit."

He added: "Trust within the supply chain, founded on decent contracts and a fairer share of margins, still has to be seen as the way forward and we are speaking with members about the latest situation as it develops. If Shropshire dairy farmers are to invest it needs to happen through fair, sustainable prices."

Martin Armstrong, head of group milk supply for Muller UK & Ireland Group, said: "We will continue to invest heavily to add value to farm-gate milk, but we are not immune to the severity of the decline in the value of these globally traded commodities.

"Realisations from these products are now substantially lower and after a period of record milk prices, we have no option other than to reflect this in the farm gate milk price we offer.

"Despite the reduction, we believe that the price and proposition we offer non-aligned dairy farmers will continue to be one of the best available in the UK."