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Dairy farmers tasked with shaping industry's structure

With prices rising and milk in short supply, dairy producers must seize this moment to organise themselves to inject some much needed structure into the industry.

 


Peter   Hollinshead

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Peter   Hollinshead
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That was the strong message from NFU dairy board chairman Michael Oakes who claimed failure to grasp this opportunity now would leave producers floundering in the same vulnerable state a year hence.

 

Speaking to a farmer audience at the Ardingly showground, Sussex, he said that producers must help themselves by forming producer organisations (PO) which could then negotiate on terms, including price, with their milk buyer.

 

’Shorting the market’

 

But he warned that although one of the remits of a PO was to forward plan production profiles with the buyer, producers should not see this as an opportunity to push prices up by shorting the market.

 

“This may work in a deficit market but not in one when there is surplus,” he explained.

 

“No other sector would take some of the practices we have seen in the last 18 months, but we can’t just move so it means we are tied into some pretty poor contracts which are all in the buyers’ favour and someone else is controlling our destiny,” he declared.

 

“A PO in not a vehicle to hit your processor over the head with to get more money but a vehicle where you can start to build a different kind of relationship where you share the risk and share the reward,” he claimed.

 

Pain

 

“Farmers have been through an amount of pain that they have never been through before, so the passion to help drive this forward should be there because if they are not wound up now they never will be.”

 

He said the NFU would help “knock on the door of the processor” to facilitate dialogue if that is what it took, but he conceded that working together within the supply chain was “all about trust”.

 

On the thorny question of why one of the two existing POs was finding the going sticky at present, he admitted they were ‘struggling’ with Muller and said he believed the company was working to change the structure of producer representation where the non-aligned would have as much say as the aligned on the producer group.

 

He said he hoped that as the former Dairy Crest producers got more say things would change and “we have got to help facilitate that and make sure those farmers are represented”. But he warned the thrust for change must come from the grassroots producers and he saw Muller’s forthcoming countrywide member meetings as an ideal opportunity for publicly airing these issues.

 

 

 


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