Changes to the way the dairy supply chain operates will require buy-in from major retailers, trade body Dairy UK has warned.
The organisation, which represents processors and farmers, this week published a wide-ranging report - The Future of Milk Marketing - in which it examines options for reforming how milk is bought and sold.
Among the suggestions covered are long-term price arrangements to provide more stability for producers. The report says: "Many milk buyers are making great efforts to commit their customers to longer-term ?contracts. However, the industry can only move down the road of long-term pricing if their customers are prepared to do it."
Another proposal is 'cost-plus' pricing, in which farmers and processors would be guaranteed an income that was at a certain level above their costs. "However, the practicality of such a system requires the buy-in of customers," adds the report.
Dairy UK director general Jim Begg said that retailers were key to the future. "Without them, the stability and the
co-operation that the industry is seeking cannot easily be delivered."