Milk prices to rise

The NFU has praised today?s announcement that Asda is to raise First Milk?s cheese price by £400/tonne but is also calling for retailers to increase the price of raw milk immediately in order to encourage confidence in British dairy farming.

Consumers face price increases of 3p on a pint of milk because of a shortage caused by the wet weather. This has meant that dairy cattle have had to be kept in sheds and fed on silage rather than grass which reduces the amount of milk that they can produce.

The threat of high prices was signalled yesterday when First Milk, Britain?s largest dairy cooperative, declared force majeureon August milk prices. This is invoked only when circumstances beyond the control of a supplier prevent the terms of a contract being fulfilled.

Industry leaders warn that the prices paid to farmers must rise from 20p to at least 25p a litre.

In a statement, NFU President Peter Kendall said: 'The weather has been totally demoralising and has nipped any recovery in confidence that should have occurred with rising dairy markets well in the bud. The industry has been muddling through these last few difficult weeks, but something has to give ? The only way to avert a severe reduction in volumes is for the supply chain to deliver an immediate and significant price increase to dairy farmers. I welcome Asda?s move as a significant first step, but this must be followed by other supermarkets and must extend into all other dairy categories.'