Farmers question retailer margins on dairy products

Farmers and farmers’ unions have been putting the spotlight on retailers and the role they are playing in the supply chain as producers find themselves under increasing financial pressure.

Peter McCann

3 August 2015

Farmers question retailer margins on dairy products

Farmers blocked off parts of the car park and the deliveries entrance to Asda in Strabane, Co Tyrone, on Friday night.

Farmers took milk off shelves and into trolleys to the checkout in Strabane on Friday night.

Representatives from the Ulster Farmers’ Union (UFU), the National Farmers’ Union (NFU) and the National Farmers’ Union of Scotland (NFUS) have met in Belfast to discuss the current situation in the dairy sector. Much of the focus was on the role retailers are playing in the supply chain.After the meeting, UFU president Ian Marshall acknowledged that global dairy markets were currently against dairy farmers, but highlighted that retailers have consistently kept prices of dairy-based products up in shops, while wholesale prices have fallen.

After the meeting, UFU president Ian Marshall acknowledged that global dairy markets were currently against dairy farmers, but highlighted that retailers have consistently kept prices of dairy-based products up in shops, while wholesale prices have fallen.

Quoting figures from the Agriculture and Horticulture Development Board (AHDB) in England, the UFU highlighted that wholesale butter price has fallen by 28% in the last 12 months. However, the retail price has increased by 0.1% over the same period. Likewise, wholesale mild cheddar has fallen by 25%, but on average the retail price of cheese is down by just 3.4%.

Marshall said: “The simple question now is who is making money from cheese and butter? It’s clearly not our farmers, some of whom have seen a 50% fall in farmgate prices over the same period.”

Speaking at an emergency meeting of the Northern Ireland Assembly’s agriculture committee last week, UFU deputy president Barclay Bell said: “There is evidence that there is a dysfunctional supply chain. There is a mistrust that must be addressed and we must work together.”

Protests

Meanwhile, farmers have been showing their frustration about current ex-farm prices by holding protests outside supermarkets in recent days. Asda stores in Coleraine and Strabane were targeted on Thursday and Friday respectively.

Farmers in Strabane blocked off parts of the car park and the deliveries entrance with 24 tractors and a loading shovel. Inside the store, all milk was taken off the shelves, put into trolleys and taken to the checkout. This has been called “the #MilkTrolleyChallenge” on social media and videos have been posted of similar demonstrations in Britain.

There have also been calls for the European Commission to lift the price intervention for milk and for government to consider introducing a minimum price for milk.

A petition on the website of the UK government that calls for a minimum price that farmers must receive from processors has already received over 8,000 signatures. It requires 10,000 signatures to receive a response from the government and 100,000 to be considered for debate in parliament.