Dairy farmers in the north-east have been dealt a “significant blow” with news of a cut in prices paid by Muller Milk, Scottish Conservative Shadow Secretary for Rural Economy Peter Chapman said today.
The processing giant announced it is reducing the price paid by 1.5p a litre, a 5% cut which will take effect in the New Year.
Producers in the north-east are already paying haulage charges of 1.75p a litre to transport milk from Aberdeenshire to the Central Belt following the closure of Muller’s processing plant in Aberdeen. That puts producers in the north-east at a competitive disadvantage to producers closer to Muller’s main plant in Belshill, Lanarkshire.
Mr Chapman, a north-east region MSP, said: “Dairy farmers in the north-east went through a great deal of pain over a two-year period when prices were cut previously. They have only had a short period of relatively modest profits since then, and now here we are with prices being cut again.
“It will come as significant blow in terms of the cost of doing business and will be a huge worry for the industry. There is an enormous black hole of debt that was built up while prices were low – you don’t pay that back after just a year of getting a better price for milk.
“The message always seems to be that when the market turns, it takes forever for prices to improve at the farm gate, but as soon as the market goes the opposite way, the primary producers are hit straight away.
“It is totally unfair that all the power lies with the processors and supermarkets, rather than the producers.
“For farmers in Aberdeenshire, this price cut will come on top of considerable haulage charges to transport milk to the Central Belt.
“It is no exaggeration to say that this is driving producers out of business altogether. I hope some pressure can be brought to bear on Muller to reconsider this.”