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First Milk accused of 'letting a lot of people down'

First Milk has been accused of 'letting a lot of people down'.

The cooperative, which delayed payments to producers, was among organisations questioned at Holyrood today as MSPs begin an inquiry into the drop in milk prices.

Among those giving evidence was dairy farmer Kenneth Campbell, who is confident the industry in Dumfries and Galloway will survive.

MSP calls for action at European level

Rural Affairs Secretary Richard Lochhead raised the issue at a meeting in Brussels today Credit: David Cheskin/PA Wire

The Scottish Government has called for action at a European level to help dairy farmers who have been hit by falling milk prices.

Rural Affairs Secretary Richard Lochhead discussed the issue of milk prices at a meeting of the Council of Ministers in Brussels today.

The price of a two-litre carton of milk has dropped to £1 in many supermarkets.

Mr Lochhead has said he understands that Scottish dairy farmers are facing a "real struggle".

“We also know that this is a problem affecting farmers in many countries across the EU. That is why it is crucial that we consider what can be done at a European level to support farmers, protect our dairy industry and safeguard its contribution to our economy and natural larder.

"I hope we can agree on action across Europe that helps to give our dairy industry a brighter future."

– MSP Richard Lochhead, Rural Affairs Secretary

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First Milk meets Border region's dairy farmers

Some dairy farmers' milk payments were withheld. Credit: Yui Mok/PA Archive/Press Association Images

Dairy farmers from the Border region will today meet representatives from First Milk, the co-operative owned by British farmers.

Last Monday the group announced that payment to around 1,000 milk suppliers would be delayed for two weeks, because of falling prices.

Now, First Milk will meet member farmers in Carlisle to explain why their payment was withheld.

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Fact check: Is milk really cheaper than water?

The president of the National Farmers' Union (NFU) Meurig Raymond said on BBC radio today that "liquid milk ... is now cheaper than water".

He was referring to the price that farmers are paid for milk versus the cost of bottled water in a supermarket.

Is milk really cheaper than water? Credit: Dave Thompson/PA Wire/Lars Halbauer/DPA

The NFU confirmed to ITV News that farmers across the country are paid a variety of different rates, but that it does drop as low as 20p per litre.

Of course, the cost of bottled water varies considerably depending on the brand and quantity purchased.

A quick check of the three largest supermarkets shows that budget brand bottled water costs as little as 10p per litre. Branded mineral water starts at around 40p per litre, which is similar to the starting retail price for milk.

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Farmers forced to wait for milk payments

Returns from dairy products have fallen by more than 50% in the past year. Credit: PA

The UK's largest dairy company has delayed paying its farmers, following a crash in the price of milk.

First Milk, a co-operative owned by British farmers, said 2014 was a "year of volatility that has never been seen before" in the global dairy industry.

Its chairman, Conservative MP Sir Jim Paice, said it will delay today's payments to farmers by two weeks and all subsequent payments by a fortnight.

"We are a business owned by dairy farmers. The board are acutely aware of the difficulties this current extreme volatility is causing First Milk members and the UK dairy industry.

"We don't know how long this current market downturn will last, and we are aware that hundreds of UK dairy farmers are unlikely to find a home for their milk this spring.

"Our priority is to make the business and our processing assets as secure as possible in order that we can continue to process and market every litre of our members' milk."

– Sir Jim Paice, First Milk Chairman

It's a tough time for dairy farmers - in the past 12 months returns from globally traded dairy products have fallen by more than 50%, leading to a steep fall in milk prices around the world.

Last year the chief dairy adviser to National Farmers' Union warned that the cost of production outstripped the price farmers were receiving for milk.

Cumbrian MP calls for the Government to help dairy farmers

The Westmorland and Lonsdale MP, Tim Farron, has accused supermarkets and other big buyers of "appalling exploitation" of dairy farmers following recent cuts in the price per litre paid to dairy farmers.

Mr Farron claimed that prices were now 6p per litre lower than the cost of production and was putting the long term future of many farmers in doubt.

The Food Minister, James Paice, said the cuts were a heavy blow and said he was willing to 'bang heads together' but added that it wasn't for ministers to actually set the price.

This is the full dialogue from the House of Commons:

Mr Farron's office says that in May 2012, four major dairy processors: Dairy Crest, Robert Wiseman, Arla and Muller, announced a cut of 2p a litre in the price paid to dairy farmers for milk, which on its own could cost some dairy farmers up to £20,000 per year.

They say this has inexplicably been followed by a further cut of 1.7ppl by Robert Wiseman, 2.0ppl by Arla, 1.65ppl by Dairy Crest, which will take effect from 1st August 2012.

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