Life’s never dull in dairy. Not now. And certainly not this week, as “catastrophic” farmgate milk price cuts caused wailing and gnashing of teeth.
From Wiseman leading the pack with a 1.7ppl milk price cut last week, to the decision, on Tuesday, by Dairy Crest Direct (Dairy Crest’s milk supply group) to issue a PLC-style £35m ‘profits warning’, the proverbial has hit the fan.
The NFU will next week meet with Farming Minister Jim Paice for speedily convened crisis talks, as members fear, justifiably, for their futures.
And no doubt buyers at Tesco and Sainsbury’s - which have brought in such progressive pricing agreements - are fearful too, as they are forced to compete while the premium they are paying has increased.
But if you’re Asda, Morrisons or The Co-op, you shouldn’t rest easy. With dairy farmers now losing up to 5ppl, the latest price cuts look unsustainable, and presage, surely, a further violent contraction in the dairy herd. Sainsbury’s and Tesco have taken a long-term view, which rewards efficiency gains. Their rivals argue they’re doing their bit, but a country mile separates the two approaches.