Dairy cows

British farmers are producing the equivalent of more than 40 extra pints of milk per person, per year compared with the same time two years ago, according to Müller UK & Ireland.

Analysis of AHDB Dairy statistics by Müller suggests dairy farmers over the past 12 months had increased the supply of milk by 1.6 billion litres when compared with 2013 – representing an extra 80,000 farm tanker loads.

It comes as Müller announced a further cut to its farmgate milk price from 7 September, with a reduction of 0.8 pence per litre to 22.35ppl for its 1,200 farmer suppliers.

Müller said the reduction – which follows similar price cuts by Arla, Dairy Crest and First Milk recently – was the result of a combination of the glut in supply and weak global demand. This has been compounded by a slump in GDT Auction prices, which crashed to their lowest levels in two years this week, while cream suffered a loss of 10% in its value in July alone, and by 35% during the past 12 months.

“We are seeing a significant imbalance between supply and demand in the UK and globally and this is weighing heavily on the value of the milk produced by farmers,” said Müller head of milk supply Martin Armstrong.

“We are not in a position to avoid the impact of these powerful and cyclical market fundamentals, but we are continuing to invest heavily to create a diverse dairy business in the UK and to work collaboratively with our farmer board to align supply with demand,” he added, claiming the company remained focused on “adding value and innovation so that we can pay a premium over the commodity market value of farmgate milk”.

The latest cut to Müller’s milk price comes against a turbulent backdrop for the UK dairy industry. Farmers have been protesting all week over low farmgate and retail prices, while the main UK farming unions are set to hold a crisis summit on Monday (10 August).

In response to the price cut, Philip Rowney, the chairman of the Müller Wiseman Milk Group board – which represents dairy farmers who supply the company – said the group’s role was to ensure Müller was “under no illusions as to the position which farmers currently find themselves in”.

To this end, he said discussions had been “constructive and robust” with the processor “and whilst there is no doubt that farmers who supply the company will not welcome this news, Müller UK & Ireland remains committed to a leading non-aligned price and contract proposition”.