Scotland’s dairy sector has fallen further into crisis with news the main milk buyer in the north and north-east is cutting its price again.
Muller Wiseman yesterday confirmed its standard litre milk price will fall by 0.8p to 22.35p a litre from September 7.
The company blamed a “significant imbalance between supply and demand” for the price cut and said British dairy farmers were producing the equivalent of 40 extra pints of milk for every head of population in the UK.
The news comes at a time of growing unrest among producers who this week took to supermarkets to protest against low prices.
Dairy farmers from across the UK have resorted to emptying supermarket shelves of milk, releasing images and videos of their ‘milk raids’ on social media.
Producers in Ayrshire were among those protesting at retailers such as Asda, where they purchased all the milk on the shelves with funds from donors.
The desperate farmers sported t-shirts with the slogan ‘#Milk must have a future’ and held posters which showed their prices had gone down 25% against a 1% increase in production.
NFU Scotland was quick to pledge its support for the protests and revealed it had provided financial assistance to farmers in Ayrshire to carry out the raids.
President Allan Bowie said: “They [producers] are frustrated at the dialogue with processors and retailers and as a result feel they have been left with no option but to try and put pressure on them to help improve their margins.
“Farmers are in a position of desperation and this latest action is a reflection of the current dialogue that is not working and the position farmers are now in that they feel they have been left with little option.”
Farm minister Richard Lochhead promised to maintain pressure on retailers and the food service industry to ensure they supported Scottish dairy farmers.
He said: “The public will understand the frustrations being expressed by farmers as it must be galling for them to witness massive promotion of imported cheeses, butters and yoghurts, whilst domestic milk secures, at best, a zero margin.”
Muller’s price cut announcement follows similar cuts by various processors in the past few months.
Last month Scotland’s largest independent dairy – Graham’s The Family Dairy – sparked outrage by announcing plans to pay farmers 7p a litre for some of their milk.
Earlier this year the Bridge of Allan-based firm introduced an AB pricing mechanism where farmers are paid one price – the A price – for 90% of the volume of milk they produced last year, and another price – the B price – for any milk produced on top of that.
As of August 1, the firm is now paying 23.75p a litre for its A price and 7p a litre for its B price.
Company chairman Robert Graham said the low B price had been set as a result of having to process an extra 1.3million litre of milk a month.
He said this was being sold at a loss of between 5 and 7p a litre, or the equivalent of £65,000 and £91,000 a month.
Meanwhile, UK farmers’ co-operative First Milk is currently paying its producers between 14 and 16.5p a litre for their milk.
In January the Glasgow-headquartered firm was forced to delay payments to farmers after revealing it was suffering from cash-flow problems.
It also asked members to increase their capital payments into the co-operative to keep it afloat.
Scottish Government has pledged support for the firm and is providing more than £400,000 in capital support towards its Campbeltown creamery.