NFU dairy board chairman Rob Harrison claimed it was “morally wrong” that a dairy posting pre-tax profits of £13.7M in a “difficult market situation” was paying such prices.
According to the latest AHDB Dairy milk price table, Meadow Foods is second from bottom – paying 19.29p per litre.
The dairy also recently wrote to all its suppliers to inform them of major changes to its milk pricing schedule, knocking 20% off the ‘A volume’ it purchases from farmers from April.
Voluntary code
Harrison claimed Meadow Foods took no consideration of the voluntary code of conduct on contracts, adding that it had no formal producer representation.
He said: “Meadow Foods is a major player in the UK dairy industry and should be showing leadership, fairness and transparency to its suppliers and customers.
“Writing to farmers before the New Year to let them know of major changes to their milk pricing schedule from April with no prior discussion and consultation is unacceptable.
Harrison added: “The NFU fully recognises the continuing difficult dairy market situation facing all in the supply chain but solutions need to be found collaboratively between suppliers and processors – solutions that are explained fully.
“Meadow Foods knows its suppliers need a strong processor but it also needs strong, resilient dairy farmers that understand business needs now and in the future.”
Meadow’s response
In response, Meadow Foods claimed the price it paid for milk was “in line” with other processors and the result of the “immense and unprecedented downward pressure we are all experiencing in the market”.
A spokesperson said: “We realise the pressure that this puts on our producers and we will continue to make every effort to move prices back upwards as soon as possible.
“Over the last few years, the business has made a number of investments and implemented measures to improve production efficiencies in order to protect profits.
“The profits generated this year will once again be re-invested in the business in order to provide our producers with a long term and secure outlet for their milk.”
The average UK farmgate price stood at 24.20ppl (pence per litre) in November – a 0.7% decrease on October, according to latest figures from the Department for Environment, Food & Rural Affairs.
The November 2015 price was 16% lower than the same month in 2014.
In December, Morrisons announced it was raising the retail price of its milk, and the price it paid to farmers. The retailer also promised to pay the 10p added to the cost of its new 4-pint Milk For Farmers brand directly back to the farmer.
This story has been updated to include a response from Meadow Foods.