Shropshire dairy farmers offered milk fight boost

They will be urged to join forces to collectively negotiate prices and contracts with major companies. Meetings will be held by National Farmers' Union officials in the new year to urge farmers, including several in Shropshire, to form dairy producer organisations (POs).

It comes amid warnings that the dairy industry remains in crisis going into 2016. Henry Yates, who farms near Bridgnorth, admitted the dairy sector is experiencing a "dire" time.

"If an improvement in income does not come soon we shall be forced long term into having large-scale industrial-type cow factories providing our milk," he said. "The idyllic picture of cows on family farms grazing our pastures will be a thing of the past."

The first dairy PO in the country was formed by suppliers' group Dairy Crest Direct in May this year. It gave legal backing to the independent group, which works with Dairy Crest on behalf of its 1,050 farmers, to hold talks and agree contracts with the company.

Michael Oakes, National Farmers' Union regional dairy board chairman for the West Midlands, which includes Shropshire, said farmers are continuing to struggle as they are still not receiving milk prices that cover their costs.

But despite predicting further tough times for farmers, Mr Oakes said dairy POs could be part of the solution to help them cope with future challenges.

He said: "POs are still in their infancy here in the UK, but we are confident they have a future – POs are one form of collaboration and we're encouraging our members to look to other ways to collaborate either horizontally or vertically in the supply chain.

"The NFU have and will hold meetings for farmers to explain what we believe are the potential benefits of POs. These should be seen as a progressive positive change that the dairy supply chain clearly needs whether you produce or process milk.

"Under certain circumstances POs allow farmers to negotiate price and contractual conditions with their milk purchaser without breaching competition laws. They allow farmers to work better with processors to add value, for instance by matching volumes to processing capacity.

"I would urge farmers to attend these PO meetings."

Mr Oakes added: "The vast majority of producers in our region, unless they are lucky enough to be on a premium retail aligned contract, will be facing a very grim winter on a milk price that doesn't even cover their costs."

Farmers For Action has also warned of a bleak 2016 for dairy farmers, and revealed protests could continue nationally in the new year if milk prices fall.

Market Drayton-based Muller Dairy has recently announced that it is to hold its milk price in January, despite continuing falls in the global dairy market.

It will offer 22.35p per litre to non-contract aligned farmers.

Farmers estimate that it costs between 30p and 32p to produce a litre of milk.