More needs to be done to innovate new milk products in Scotland to cope with the record predicted milk surplus, according to NFU Scotland. The union is hoping that the reopening of the Food Processing and Marketing Grant scheme by the Scottish Government could encourage new entrants to bring innovative proposals into practice in the sector.

A spokesperson for NFU Scotland said: “Although these figures from AHDB may seem to be relatively straightforward, the whole story is actually far more complicated than how it initially appears.

“The figures fall in line with the communications we have seen coming from other processors over the last few weeks and show that the issue is not necessarily a problem with volume but more a problem with moving the milk to the production sites.

“The issue facing the dairy industry in Scotland isn’t necessarily its capacity for production, it is actually a lack of market-led demanded product innovation.

“Recently, Scottish Government recognised the issue being faced by the industry and reopened a small window for the Food Processing and Marketing Grant. This is hoped to, in some small way, encourage innovative new entrants in the Scottish milk industry.

Meanwhile this week, the NFU has written to the Efra Select Committee calling for an urgent investigation into the country’s liquid milk processing sector to safeguard the long-term prosperity of the UK dairy industry.

Collapse

The request comes just a fortnight after the collapse of Welsh liquid milk processor Tomlinson’s Dairies Limited, now in administration, which forced more than 70 dairy farmers to find an immediate new buyer for their milk and left many without payment.

NFU dairy board chair Michael Oakes said: “The recent collapse of Tomlinson’s brings into sharp focus some of the issues we’ve seen recently in the liquid milk market. Tight margins across the dairy supply chain have left us in an unsustainable situation with the farmer carrying much of the risk.

“There have been sharp cuts in the farmgate milk prices paid by most major processors to around 24/25p/l, well below the cost of production for many dairy farmers. This is putting severe pressure on those farmers who have not fully recovered from the 2016 downturn which saw the farmgate price drop below 20ppl.”

AHDB reported a survey which estimates that GB now has 8,820 dairy producers. This is a reduction of 30-35 producers (0.4%) compared with the last survey in February this year.