A call to action was issued this week, with the distribution depots of two unnamed retailers in the firing line. Several retailers have phoned Farmers For Action to try to ascertain what is likely to happen.
“We want to send a strong message to retailers that farmgate prices across all sectors are just not sustainable,” said FFA’s James Badman.
Recent statements by dairy processors have inflamed the situation after the milk strikes last month, with further talk of imminent milk price cuts. Robert Wiseman is still insisting the price it pays farmers is “at a premium over our major competitors”.
While it has guaranteed its milk price until January 2006 it has stated that “this level of premium cannot be maintained and we will be seeking to narrow the gap in early 2006”.
This is likely to herald another round of tit-for-tat price cuts between it and Arla, which has said it “will not allow itself to be disadvantaged”. Dairy Crest has guaranteed it will hold its liquid price until April, however.
Any price cuts will be met with fury among farmers, who have seen costs rise by 0.75ppl over the last year and can expect to see further rises of 1ppl next year according to dairy consultancy firm Kite.
Retailers may, in fact, be glad of any protests. Farmer action has been the single most successful factor in increasing retailer milk margins over the years, as consumer liquid milk prices have risen while prices paid to processors have fallen, according to the MDC. Action has had no long-term impact on farmgate milk prices.