Don’t miss this month’s new look Dairy Farmer. Take a look at the digital edition today.
Tesco, Morrisons and latterly Asda’s trading results are showing just how tough the major retailers are finding it, and the one thing they need now like a hole in the head is bad publicity.
So well done to those who brought pressure to bear and achieved the tremendous media coverage they have, and to the various industry bodies who seemed to have found that afterall, deep down, they did have that under used capacity for unity.
The action culminated in pledges by the retailers running non-aligned milk pools to pay more to their processors to be passed back to producers.
But before you get too excited the reality is the amount of new money won’t amount to much. Calculations estimate milk cheques will be increased by 0.25 to 0.3ppl if all of the additional money was spread across all of the non-aligned farmers in the country, taking into account the fact that Arla’s extra allowance will have to stretch across its 13,500 European members.
But Morrisons’ idea of a higher priced farmers’ brand with 10ppl going back to Arla suppliers will be more of a severe test of consumer support.
AHDB Dairy has nailed its colours to the mast and seems confident conscience will prevail, but others see this more as a double edged sword and fear, when push comes to shove, customary shopping habits will prevail with the resultant far reaching implication.
Meanwhile, on the wider front, the GDT soared by 14.8% this week as Fonterra held back on volumes, but there’s a long way to go to restore sanity.
Nevertheless it does give us a breathing space and we wait in anticipation that the market may have finally bottomed out.
We jolly well hope so!
Peter Hollinshead, Dairy Farmer editor