Shropshire dairy farmers dealt new blow as Muller cuts milk prices

Producers have reacted with fury after the yoghurt and butter giant announced it is to slash 1.75p per litre from the price it pays for milk on March 5, taking its standard rate to 24.15p.

The time when the troubles for dairy farmers could be a described as a crisis are almost behind us. That is not for a good reason – it is because things are moving into the realms of total disaster.

Shropshire's yoghurt and butter giant Muller has announced a cut of a little shy of 2p per litre in the price it is going to pay for its milk. It will take the standard rate to 24.15p.

To describe that as a rock bottom price would be inaccurate. It is far below the price Shropshire's dairy farmers have declared in the past is required for them to break even.

They are now producing at a loss. If they milked all their cows and then poured the milk down the drain, it would probably make more economic sense, as they would save on distribution costs.

Knowing their current luck, though, that would no doubt be offset by a crushing pollution fine.

There is a storm in the milk industry at present, with various factors at work over which Shropshire's dairy farmers have absolutely no control. Some are going to able to batten down their hatches better than others.

The move piles fresh misery on the crisis-hit dairy industry, and drags thousands of producers further from the break-even point for production.

Carl Ravenhall, managing director of Muller Wiseman Dairies, said: "After leaving our milk price unchanged for February, we must now reflect further drops in the value of cream and butter products and the need to be competitive in the supply of dairy products to our customers in our March price.

"We continue to take very difficult and painful decisions within our company to ensure that our costs are as low as they can be, but our business cannot compete if the cost of the milk that we buy from farmers is substantially higher than that of our competitors.

"We very much look forward to seeing an improvement in the market for farm-gate milk which can then be reflected in the milk price which we can offer."

However, Michael Oakes, the NFU's regional dairy chairman, said the recent price cuts were "crippling", adding: "We understand that dairy markets remain very difficult but stating that this latest milk price cut has been taken to 'remain competitive in an environment where other processors are paying less for their milk' makes this price cut entirely unacceptable."

Dairy Crest announced that its new price of between 23.2p and 25.1p per litre will remain unchanged until July. First Milk has also held its prices, which are lower than Muller's at 22.7p to 24p.