But the farming unions were disappointed by the comments saying they were unhelpful and inaccurate.
Dairy UK has warned regulations on milk contracts could increase volatility and uncertainty for farmers.
The NFU and NFU Scotland were disappointed after Dairy UK chairman and Glanbia Cheese chief executive Paul Vernon warned contract regulation could increase volatility and vulnerability for farmers at the annual Dairy UK dinner on Wednesday (June 27).
The unions said the comments were unhelpful and inaccurate.
Mr Vernon warned potential contract regulation had to set out details of the price payment and this would mean prices would either have to be ‘fixed or calculable’ under the Common Market Organisation regulations (CMO).
Fixed prices would lead to short-term contracts ‘leaving farmers vulnerable’, he said.
“Calculable would be based on commodity markets.
“Is this really what farmers want? We believe it will give them less certainty.”
Dairy UK instead proposed alternatives including notice periods to be mutually agreed, with producers able to provide three months’ notice, but permitting purchaser discretion on prices.
“We believe this would provide more benefits to farmers than the current proposals under the CMO.”
But the farming unions said Defra’s consultation on regulating milk contracts was a ‘golden opportunity’.
They said the Voluntary Code of Practice had not worked but processors exercising best practice had ‘nothing to fear’.
NFU dairy board chairman Michael Oakes said he failed to see how a consultation on how milk contracts were regulated was detrimental.
“To be clear, this is not about setting the price or stifling innovation, it is about a more professional, collaborative relationship between dairy farmers and milk buyers going forward – something we need to ensure the success of the UK dairy industry as we leave the EU.”
He added Government regulation of data collection and auditing would support AHDB’s market intelligence and allow farmers and buyers to develop bespoke solutions to manage risk.
Dairy UK said it would keep ‘battling’ and not shy away from tackling threats to the industry, ‘if necessary on a legal basis’.
Paul Vernon highlighted Dairy UK’s success in preventing ‘Kinda cheese’, a processed nut and chick pea non-dairy product’, being granted a trademark which could have set a precedent ‘detrimental to the whole industry’.
Dairy UK has also set out a new mission, ‘to promote consumption of UK dairy products domestically and internationally’.
And Mr Vernon announced the Dairy Council and the British Cheese Board would be ‘fully integrated’ into Dairy UK.