FW: NFU release - milk prices

Originally from: David
                        
sent to trade press

 10 April 2002
 MILK PRICE CUT WILL SHATTER INDUSTRY CONFIDENCE – NFU

 Further milk price cuts expected in April would shatter industry
 confidence and lead to farmers questioning their future in the industry,
 the NFU has warned.

 The latest downturn could see some farmers receiving prices close to the
 damaging milk price trough in 2000 when prices dipped to as low as 14.61
 pence per litre.

 NFU Milk Chairman Terrig Morgan said: "News of these further milk price
 cuts will devastate producers, especially as last year they had begun to
 rebuild some of the confidence that had been lost after three years of
 declining incomes."

 The continued strength of sterling and the decline in world commodity
 markets are both key factors in the decline in prices, but the NFU is also
 pointing to the structural problems in the UK dairy industry which are
 putting downward pressure on producer returns.

 Mr Morgan added: "The strength of sterling and world commodity markets are
 out of farmers' hands, but when producers have tried to help themselves by
 building marketing structures which will rebalance the power in the supply
 chain they have been thwarted.

 "We are already challenging this aspect in the European courts. But in
 light of the Curry Report* we will be explaining to the OFT that the dairy
 industry is 'transnational' – and that our dairy farmers should be free
 to build the sort of structures that exist in other parts of the EU."

 In addition, the NFU is also calling for full payment of the £51 million
 in agrimonetary compensation available to help dairy farmers cope with
 currency fluctuations. That money will be lost if the UK Government
 doesn't make a claim by the end of April.

 "We will be pressing the Government to make the claim," said Terrig
 Morgan.

 Notes to editors:
 *The Policy Commission on the Future of Food and Farming, chaired by Sir
 Don Curry, reported in January. It points to the importance of farmer
 collaboration in marketing (and other processes in the food chain) as a
 key element in delivering a "sustainable, competitive, and diverse farming
 and food sector."

 One of its key recommendations was that the competition authorities be
 encouraged to take into account the global nature of the milk market when
 looking at new or expanding collaborative ventures in the UK. This would
 give UK farmers the opportunity to build the collaborative ventures
 enjoyed by farmers and their co-ops in other countries.

 -ends-

 Rebecca McAuley
 National Farmers' Union Press Office