MEP says low milk price is bad news for the North East

23 January 2015

The price of milk in UK supermarkets has fallen to levels which are unsustainable for UK dairy farmers, with prices dropping from £1.39 to just 89p. The NFU suggests that this is leading farmers to leave the industry with around 60 having left in December alone. Milk in supermarkets in the UK can now be cheaper than water and the price can be below the cost of production. In response MPs have called for an EU-wide review of milk prices.

Paul Brannen, Labour MEP for the North East of England visited a Northumberland dairy farm to hear for himself the impact the low price is having. North East dairy farmers are being hit by the low milk price as are others around the country. The visit was organised by the NFU.

Paul said “This is a complex issue which has many causes, including the Russian ban on importing farm produce for the EU. The fact that global forces impact on local farmers here in the North East shows why we need to work together at a European level.

“I’ve heard some people say that milk producers need to be more efficient or that they need to respond to market forces and if they can’t make money they should go out of business like anyone else. I just don’t agree with that view because not all milk is created equal. In response to consumer preference milk produced in the UK is often produced by cows who are grass fed and spend the summer outside. If we rely on imported milk we just can’t guarantee the quality.

“Reductions in milk prices might seem like great news for consumers who are under pressure from squeezed living standards. But a short term saving in price can have a medium and long term effect on the dairy industry. This could mean that consumers in the future will have milk imported from many miles away rather than produced locally and with standards of animal welfare that we just can’t guarantee.

“There is also the impact on jobs and the environment in the North East with dairy farmers providing employment both directly and within their supply chain. I’d like to see action taking to protect the industry here in the North East and elsewhere in the UK.

“As a first step Labour want to see a review of the role of the Groceries Code Adjudicator with a view to their scope and powers being increased to enable them to act across the whole of the supply chain.  Currently their scope centres on the processers and the retailers, the process has to also include farmers.

“Longer term farmers need to get more involved in the processing of their milk into higher value products such as cheese and yogurt.  This will involve more collective and co-operative working, to enable farmers to increase their clout in the market.

“I believe farmers are against the reintroduction of EU milk quotas because they would have a negative effect in the medium term but would welcome fresh efforts by the Government and the European Commission to open new markets for UK dairy producers.

“We should all demand retailers respect the situation of farmers who need to receive fair and stable price for their produce in order to maintain continuous production. There is also a role for customers in asking their supermarket managers for a guarantee that they are paying a fair price to British farmers for milk.

Laurie Norris, NFU regional dairy adviser said “Many dairy farmers are struggling to make ends meet and we’re deeply concerned about the future of the industry. It would be bad for British jobs and the environment to lose any more of our dairy farmers and for us to become reliant on imports.

Dennis Gibb, dairy farmer, said “It was good to see Paul on the farm seeing for himself the impact of the low price of milk. We are passionate about what we produce and it’s demoralising to see the price so low in the supermarkets. It devalues what we do and it doesn’t represent the hard work that goes into producing it. We just want a fair price for the quality milk we produce. 

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