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    NFU issues dairy warning

    NewsTuesday 16 April 2013
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    The National Farmers Union has issued a statement that suggests that dairy farmers can expect forward-looking buyers to seek markets that maximise the value of milk and dairy products. 

    Since the events of the summer of 2012, some significant changes have been achieved to the environment in which the British dairy industry operates. 
     
    The percentage of milk procurement volume that is now signed up to the Dairy Industry Code of Best Practice for Contractual Relations now stands at 85%. And, major milk buyers are also developing modern and dynamic pricing mechanisms, while the general public also has a much better understanding of the situation that British farmers are facing. 
     
    Mansel Raymond, the NFU dairy board chairman, spoke on the union’s official site, saying: “I’m not here to speculate; I want to focus on the facts, specifically one important fact.
     
    “There is an insatiable and growing demand for dairy products globally. The GDT/Fonterra auction alone has seen values of dairy commodities rise by almost 40% since early March.
     
    “Nearer to home, European auctions have seen Gouda and Emmenthal values climbing and the UK dairy indicators AMPE and MCVE have reached 32.4ppl and 33.0ppl respectively for March, up 34% and 5% on the year. In fact, we estimate that recent cream valuations would put AMPE above 35ppl today. So there is only one way in which the price of milk should go - and that is up.
     
    “The backdrop to all this is that farmers are emerging from one of the hardest farming years in decades. Recent industry estimates put feed cost alone up by over 2ppl this winter as a result of higher inclusion rates and costs.
     
    “Our message is a simple one to all those who buy, use and sell the milk that farmers produce. Farmers need and deserve a market price that fairly reflects the growing value of raw milk, that allows them to reinvest and that gives confidence for the future.
     
    “Any part of the UK market that fails to achieve that, risks losing supplies of dairy products to those companies who are taking the future of the British dairy industry seriously; that will be my message to retailers and food service companies in forthcoming meetings.”
     
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