NFU Scotland met with Graham’s the Family Dairy on Tuesday 28 July to discuss the recent pricing cuts announced by the firm.
The company, which runs an ‘AB’ pricing formula, announced earlier in July it would be cutting the milk price paid to its producers. The AB pricing system sees farmers paid the full liquid price for 90 per cent of their milk under the ‘A’ pool. Further supply over and above that is paid a ‘B’ pool price, on what Graham’s calls ‘surplus’ litres of milk.
Graham’s announced that the ‘A’ price, which producers will receive on the bulk of their milk, has been cut by 1.5 pence per litre (ppl), reducing it to 23.75pp, which remains higher than a lot of its competitors. However, milk in the ‘B’ pool has been cut by 7p, effectively halving it to 7ppl.
Following the meeting, NFU Scotland’s President Allan Bowie commented: “We understand the difficulties facing Graham’s the Family Dairy, but also the industry as a whole at present.
“We do recognise that Graham’s is a long-established family business and we appreciate it has new products in the pipeline. This will help to add more value to its products which is something we strongly support.
“Graham’s the Family Dairy is one of the most innovative dairy companies in Scotland. Whilst this ties in with the vision for the future of dairy in Scotland, for that to work the company needs to take producers with it. A better understanding from all sides here will allow us to galvanize and focus our intentions on this vision but we must try and address the current fundamental problems.
“In a frank meeting we raised concerns about the price now being paid and the way this was communicated to producers and the wider industry at the time. Since this announcement we have been contacted by a number of producers who are members of NFU Scotland and who share our concerns.
“The Union believes that better communication is required to ensure producers understand the reasons behind changes that directly affect them.
“It will be necessary to meet with Graham’s the Family Dairy again in the near future to continue our dialogue and we sincerely hope that the company will meet with its producers shortly to inform them of our discussions. This will allow for industry to move into a stronger and more sustainable position. We need to focus on getting profitability back to all those within the sector this includes producers and processors.”
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