A record increase in the milk price paid by dairy giant Muller Wiseman to its suppliers was today met with a mixed reaction by Shropshire’s farming leaders.
After a summer of bitter protests by angry dairy farmers – including three night-time blockades of Muller’s Market Drayton headquarters – the company yesterday announced it will pay 29 pence a litre for milk.
It represents an increase of 2.57p, making it the largest single price rise it has ever introduced.
The company said it has just over 150 dairy farmers supplying it milk in Shropshire.
The new deal, effective from October 15, applies to all dairy farmers who supply the company except those aligned with customers like Tesco, Sainsbury’s and the Co-operative Group, which have their own deals.
Pete Nicholson, Wiseman’s milk procurement director, said the price rise is a platform ‘from which the industry can begin to look forward’.
He said: “Muller is ambitious to grow and to play a major role in UK dairy. This presents real opportunities for dairy farmers who currently supply the group.”
Shropshire farming leaders today largely welcomed the price rise, but said they were disappointed that it still falls short of the farmers’ average cost of production – currently about 31p a litre.
John Mercer, NFU regional director, said: “The price rise is welcome, however, it is important that price increases are lasting and industry wide.”
Roly Tavernor, who produces 2.7 million litres a year from 550 cows at Norton in Hales, near Market Drayton, said: “It’s good news for milk producers.”
He added he hoped it would put pressure on other dairy processors to raise prices.
Andrew Bebb, who has 100 cows at Hanwood, near Shrewsbury, producing about 750,000 litres of organic milk a year, said: “Even at 29p it’s not quite there but it’s going in the right direction.
“It’s good news, but farmers have been at the end of their tethers this summer, so it was desperately needed.
“I’d say we need to be paid about 32p a litre for our businesses to stay viable as production costs rise.”
Rod MacBean, who produces one million litres a year from a herd of 160 cows at Aston, near Wem, said: “Any price rise is welcome, especially from one of the big processors, but it still doesn’t go far enough and they aren’t recognising the cost of production – which is about 30p to 31p now – so 29p a litre doesn’t allow for any profit for the producer.
“They want us to become more efficient, but that costs money too.
“I’ve just invested £500,000 in my farm, so while I’m more efficient, my cost of production is perhaps a touch higher.
“In any other business you would shut down if you weren’t making a profit, but you can’t do that with cows, you can’t switch them off.” Paul Dutton, a former Muller supplier from Calverhall, near Whitchurch, used to produce 750,000 litres a year from 115 cows until he sold his herd in recent months.
He said: “I think it really vindicates the action taken by producers, the NFU and others during the summer.
“But I think the sooner there is a formula where producers can have their production costs covered, the better.
“This rise only repairs the damage done by Muller when they announced cuts earlier this year.”
Some farmers indicated there could be further protests, adding that the new Muller Wiseman deal was not necessarily an end to the dispute.
Rob Alderson, NFU Shropshire chairman, who farms at Onibury, near Ludlow, said: “I think this is good news and it’s down to the work done by the NFU, Farmers For Action and the support of the general public, who have taken a real interest in the plight of the dairy industry.
“We’re looking at increased production costs all the time, so I don’t think this is an end to the matter because for some producers the price they get isn’t keeping up with their increased bills. There needs to be a further review of the price later in the year, but it’s a good result to begin with.”
Paul Rowbottom , a Farmers For Action co-ordinator from Ipstones in Staffordshire, who helped organise the Muller blockades said: “It’s a good start but it’s not enough.
“We do not want to be going out protesting again, but we will as a last resort.”
New Environment Secretary and North Shropshire MP Owen Paterson said it was good that milk prices appear to be ‘picking up again’.
All the country’s major dairies announced cuts in the farm gate price between April and June, forcing the rate down to around 26 pence per litre, which farmers said was well below the 30p it cost to produce a litre of milk. The move sparked nationwide protests led by the Farmers for Action group.