NI : Backlash expected from milk producers

By James Campbell

Dairy farmers in Britain are expected to be out in overnight protests soon at Arla UK milk processing factories and possibly at some supermarket distribution depots. This follows a final rejection this week of efforts by negotiation to prevent a milk price cut of 0.35 p/litre by Arla UK.

Farmers For Action leader David Handley, accompanied by leaders of the National Farmers' Unions in Britain negotiated for 4 hours on Tuesday with Arla executives and the Arla Milk Partnership chairman.

Afterwards, Handley said that it was now necessary for dairy farmers throughout the UK to make their views known via peaceful protest, aimed initially at Arla. If this takes the form of previous actions it will involve farmers getting in the way of trucks as they attempt to leave the factories with milk to be delivered to supermarkets.

Handley's view is that all the hard work of the past six months that managed to obtain a milk price increase will be undone if farmers do not protest now.

Arla executives told the farmers' representatives that the company would have to issue a "profits warning" to the stock market if they did not go ahead with the price cut of 0.35p/l. This could result in a sharp fall in share values in Arla UK. The parting words of the company's new chief executive, Tim Smith, on Tuesday were "my obligation is to my shareholders".

Handley claims that the farming unions are united with FFA like never before and this is one battle that they cannot afford to lose. The FFA leader is trying to muster support in Ireland and other European countries.

At the same time, Handley attaches blame to the major supermarket retailers who have improved their margins on milk while processors and producers have been squeezed. He described the supermarket actions as "totally immoral and unethical".

"As long as we as an industry sit back and accept it, it will continue" said Handley. He added that it is fairly obvious that farmers are not going to get any political help.

Beef and lamb prices drop

Meanwhile, prices for beef, lamb and milk are all under pressure this week in Northern Ireland. The combination of supermarket power, reduction of EU market supports and supply/demand imbalance are all taking a toll.

The harsh realities in beef and lamb are of factories offering lower prices, with lamb quotes down by 20 p/kg this week. Beef quotes are down by 2p/kg and a further drop predicted for next week. Many finished cattle being sold now are loss making.

At the same time the EU Commission has reduced export refunds again on dairy products and has also cut refunds on beef and live cattle exports.

In answer to Journal questioning this week, EU Agriculture Commissioner Mariann Fischer Boel said that the EU would have to cease producing food for which there is no market.

The Commissioner indicated that "To make EU agriculture more competitive, reform was necessary, including a reduction in the milk price. There was little effect from the first price cut because of the very good market situation. This year, the market does not look bad either. In the medium-term, the prospects for dairy products look good worldwide. So I think our policy is definitely moving in the right direction," she concluded.