Large numbers of dairy farmers will inevitably leave the industry with no sign of market improvement in the coming months, the NFU has said.
Speaking after another raft of price cuts from UK processors in recent weeks, the union pointed to rumours of ’serious undercutting’ at processor level with milk buyers fighting for market share. It said producers could not continue to produce milk at a loss.
NFU dairy board chairman Rob Harrison said: "I would urge every dairy farmer out there to seriously look at his or her own business and question whether it can survive another period of low milk prices.
"The NFU is meeting with banks regularly but take clear advice. I want you to speak to your own bank, your consultant and your accountant. Producing milk at a loss benefits no-one and we all want a strong, resilient industry here in the UK."
Arla became the latest milk buyer to cut prices last week, with returns falling 0.75ppl from February 1 taking the standard litre price to 21.8ppl. The NFU said cuts were coming on the back of a stagnant global market.
"We know global factors have impacted demand, the ruthless retail price war is still at large and milk volumes in the UK and across Europe continue to increase with no sign of slow down," Mr Harrison added.
"Milk contract terms and pricing schedules are being changed with no negotiation, flouting the voluntary code, farmers are being put on notice and there are rumours of serious undercutting at processor level as milk buyers fight for market share at retail and elsewhere.
"It is a bloodbath and those suffering the most are our hard working dairy farmers."
Mr Harrison urged support for British dairy and said the industry also needed to look at ways to manage price volatility.