Business

Dairy farmers urged to seek advice before signing term contracts

FARMERS for Action (FFA) has issued a warning to dairy farmers considering term contracts for a large or small portion of their milk.
Gareth McKeown

FARMERS for Action (FFA) has issued a warning to dairy farmers considering term contracts for a large or small portion of their milk.

The advice comes after major dairy products company Arla UK announced a base price of 32p a litre for milk processors.

Last month dairy cooperative Dale Farm introduced a Fixed Milk Price contract option to its milk producers, due to commence in January 2018. The voluntary three-year contract to supply an agreed fixed amount of milk per month is at a base price of 27p per litre.

FFA Northern Ireland coordinator William Taylor has urged farmers to seek legal advice before signing up to any long-term contracts.

“Across the main news we now find that the large food corporates are seeking to Brexit proof food prices – roughly translated Brexit proof their profits and hold off their competition, therefore, how can it be right for dairy farmers or any other farmers to sign contracts that are firstly grossly under the cost of production and not inflation linked, merely to facilitate food corporate profit taking.”

"Do remember, the true cost of production ‘without profit' repeatedly coming back from Europe's most efficient producers via European Milk Board is just over 40p/l."

“Consider carefully before you sign your family into possible debt for the sake of food corporate and co-op profit with non inflation linked under the cost of production contracts. Legislation on farm gate prices across the staples is ultimately the answer and we are making progress," he added.

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