Britain’s dairy sector has “turned a corner” after a long period of intense pressure, David Curry, the chairman of Dairy UK, has claimed.
He attributed the progress mainly to the recent surge in milk prices and greater commitment to improving supply chain efficiency. Curry, who is also Conservative MP for Skipton in Yorkshire, said that while farmers still faced many challenges, the industry was becoming better placed for the future by focusing on adding value to milk. Dairy UK is a cross-industry body representing processors, distributors of liquid milk and dairy products and farmers.
“The difficulties in milk pricing have now eased and strong commodity price trends are now being reflected in farm gate prices,” Curry told guests attending a Dairy UK reception at the House of Commons last week. “This gives farmers the opportunity to invest more in their businesses. New supply arrangements bringing farmers, processors and retailers closer together are also very welcome.”
Speaking at another lunch organised by the Provision Trade Federation last week, Curry welcomed the new “listening“ approach promised by prime minister Gordon Brown’s government, although he said it still had to “prove itself”
Curry warned of “a lot of controversy“ coming down the tracks within the Department for Environment, Food and Rural Affairs and stressed the challenges faced by the dairy industry in meeting changing consumer needs. “We need to be a partner with government to continue doing that,” he added.
Meanwhile the latest data released by The Dairy Group consultancy suggested that now that the milk production peak had passed there was more opportunity to move raw milk supplies away from commodity cheese into higher value powders.
According to models used by the consultancy, an average farm-gate price of 20.5 pence per litre is predicted in 2007/8, rising to 21.8ppl in 2008/9.
However, The Dairy Group noted that adverse weather and sharply rising feed costs were placing UK dairy profits under extreme pressure, even though farm-gate prices were starting to rise.