A dairy deal has been negotiated between a group of milk producers and processors for a commitment to a minimum price of 27.5p per litre for the whole of 2017.
The collaborative approach to milk pricing was announced between the Fresh Milk Company (Lactalis) and the producer organisation Milk Supply Association (MSA). The 27.5ppl is a minimum price, which can rise if a market-related basket of prices goes above the price, within agreed tolerances.
NFU Scotland’s (NFUS) milk policy manager George Jamieson said the two parties deserved credit for agreeing a deal that offered clarity on prices over a significant period of time.
“It is a deal that makes real efforts to balance production to the demands of the company, and has been negotiated in collaboration with producers,” he said.
“Other processors are trying developing new milk contracts which remain voluntary code complaint, but many are not even close. NFUS believes there should be little or no scope for enforced pricing or contract terms which are not negotiated and agreed with producers.”
Mr Jamieson said NFUS had tirelessly promoted collaboration, pricing mechanisms, fair contracts and effective producer representation for many years but it had never been more pertinent.
He added: “Sadly, there are too many examples of ‘enforced’ contracts and discretionary pricing models within the dairy sector.
“Processors and producers must work together if we are to meet the challenge of volatility and global competition. In that regard, the progress that has been achieved in Stranraer is significant.”