Sir: In answer to your question (‘Did farmers really not see global price slump coming?’ 30 August, p14), yes, UK dairy farmers had anticipated a fall in dairy markets from the highs recorded earlier this year. But neither they, nor their processors, nor, might I add, dairy ingredient traders could have expected the Russian dairy embargo or the price slump. Ever since the embargo announcement, all EU dairy markets have fallen quickly.

In response, UK processors have brought prices back sharply, in some cases by as much as 7ppl since June. To a typical UK dairy farmer producing one million litres a year, 7ppl equates to £70,000, - a devastating impact.

The 1,100 dairy farmers supplying Dairy Crest through DCD have not been immune to cuts either. During the last year DCD has jointly funded, and developed with Dairy Crest, a liquid formula contract that relies on a transparent blend of market and cost data sourced from Dairy Co. This provides farmers with greater transparency in pricing and ensures the farmers involved are certainly watching market developments more closely.

DCD is also, through its successful RDPE/Defra Dairy Fund bid, looking to progress dairy futures opportunities. These could present a useful facility to UK farmers and processors to offer some further protection against volatility.

Michael Masters, company secretary, Dairy Crest Direct