NFU Scotland has called on milk buyers to deliver stability to Scottish dairy farmers.
The union says producers need assurances from processors that recent milk price cuts are only temporary.
This follows news that First Milk has cut the A price for its Scottish mainland pool by 0.25p to 25.84p a litre – the first price cut by the company since last summer.
The Glasgow-headquartered farmers’ co-operative said it was disappointed with the cut but it was in line with its policy to base farmgate prices on returns.
NFU Scotland’s milk policy manager, George Jamieson, said although the market had weakened in recent months, dairy futures and the global dairy auction, which was up 3.5% this week, all suggested milk prices should at least hold.
“That optimism is underpinned by solid forecasts for dairy products, including an expected increase in demand from China, and question marks over supply in some major milk regions,” added Mr Jamieson.
He said UK dairy market indicators – Actual Milk Price Equivalent (AMPE) and Milk for Cheese Equivalent (MCVE) – suggested farmgate prices should be around 27.5p a litre depending on the end use for the farmers’ milk. AMPE is currently around 27.7p a litre and MCVE is 31.8p a litre.
“All parts of the dairy chain are watching the market but given the very serious dent in producers’ cash flow, net worth and confidence suffered over the last two years the response of processors and retailers now is crucial,” added Mr Jamieson.
“Strong signals and a clear commitment to deliver a fairer share of the rewards from dairy markets are what is needed.”
