In the letter, the chairs of each of the union’s dairy boards highlight the need for transparency and good communication between farmers and processors during these challenging times.
Milk buyers are reminded of the importance of complying with the fair dealing legislation and maintaining open channels of communication and transparency with their suppliers. The farming unions also encourage dairy farmers to engage proactively with their milk buyers, ensuring that the milk produced meets market needs.
Fairness and transparency
NFU Cymru Dairy Board Chair Jonathan Wilkinson said: “With many dairy farmers facing a difficult winter, it is of the upmost importance that the dairy supply chain functions in a fair and transparent way. That’s why we were pleased to host an important discussion in Wales to ensure the collective concerns of our members from across the UK are represented.”
NFU Dairy Board Chair Paul Tompkins said: “This is the first real test of the new contract regulations; the first time the sector has had an Adjudicator overseeing compliance with the regulations. Farmers are also now empowered to request an explanation for how their milk price is calculated to ensure that any changes are in accordance with their contract. It is essential we see dairy farmers engaging with their buyers and the new regulations during this challenging period.”
Challenging period
Ulster Farmers’ Union Dairy Chairman Cyril Orr said: “As dairy farmers, we are entering a challenging period marked by significant market uncertainty and pressure on farm gate prices. It is more vital than ever that farmers can place trust in their processors. We need to see greater openness, transparency and genuine collaboration within milk pools. This is essential to ensure a sustainable future for dairy farmers.”
NFU Scotland Milk Committee Chair Bruce Mackie added: “For the vast majority of Scottish dairy farmers, milk prices are now tumbling at an alarming rate while production costs rise. The industry faces a very difficult few months ahead and it is imperative that there is transparency, fair play and communication between milk buyers and individual suppliers to help ensure both parties have the necessary resilience to survive this downturn.”
Dear Processor,
As representatives of the four UK Farming Unions, we write collectively to encourage responsible behaviour across the dairy value chain during what is set to be a challenging period for all involved.
With global commodity markets under considerable strain, and record milk volumes being produced both domestically and abroad, trusted relationships between farmers and their milk buyers have never been more vital. The sudden, and largely unexpected, drop in milk prices, coupled with costs including wages and borrowing, remaining high is putting farmers under considerable pressure.
We wish to underscore the importance of ensuring that milk contracts are compliant with, and developed in the spirit of, the Fair Dealing Obligations (Milk) Regulations 2024. It is especially important that any adjustments to price, whether that be to increase or decrease, are made pursuant to the regulations and in line with contractual arrangements, including any agreed pricing mechanisms or factors set out in the milk purchase agreement. If a processor wishes to alter the terms of the contract, this must be done in accordance with the regulations and the terms of the contact.
We encourage processors to foster a culture of openness and transparency with their individual suppliers, ensuring farmers feel confident to raise questions and concerns directly with their milk buyers. It is also important that farmers understand how their feedback will be taken forward. Equally, as farmers we have a responsibility to make sure the milk we are producing meets the contractual and volume expectations of our buyers.
We strongly believe that where processors and farmers are committed to working together; where there is transparency and trust, the sector is in the best position to navigate the challenges we face. This in turn will help to secure a sustainable future for UK dairy, giving farmers the confidence to invest in their businesses and secure future production.
Yours sincerely,
Paul Tompkins Jonathan Wilkinson Cyril Orr Bruce Mackie
NFU Dairy Board Chair NFU Cymru Dairy Board Chair UFU Dairy Board Chair NFU Scotland Milk Committee Chair