Dairy UK, the NFU and the NFUS have reached agreement on a voluntary code of best practice on contractual relationships between milk buyers and dairy farmers.


Commenting on the landmark agreement Dairy UK Director General Jim Begg said: “I am delighted that Dairy UK, on behalf of its members, has been able to reach agreement with the farming unions on the voluntary code. This important initiative builds upon existing arrangements, which give farmers and processors security in business relationships, whilst adding additional safeguards that will assure farmers that their contracts are not putting them at a disadvantage in the marketplace.


“The code should also enable dairy farmers and processors to build relationships of trust and mutual understanding. Only on this basis can the industry create the added value that will protect it from price volatility. We would hope that the spirit of co-operation that has resulted in this agreement can be carried forward into the future.”


Mansel Raymond NFU Dairy Board Chairman commented: “This code is the culmination of many months of hard work by all parties. The NFU has championed the cause of improving dairy contracts and we are now very pleased to be launching this code of best practice. Farmers need equitable and trusting relationships with their milk buyers and this can only be achieved by putting in place fair and transparent milk supply contracts.


“In line with the Coalition's 10 point plan we will be working with farmers and processors to see the many beneficial terms of this code translated into beneficial terms in milk supply contracts. Getting this code agreed is the right footing to move forward with the industry on a robust and ambitious strategy for the dairy sector, which is a priority for us.”


Rory Christie, Vice Chairman of the NFUS Milk Committee went on to comment: “This code of best practice is highly significant, it is about British dairy farmers working together with British dairy processors to improve the industry. Individually farmers can be weak, but the NFUS believe that dairy farmers working together can achieve a great deal and we will be continuing this collaborative effort as we work to ensure the code is implemented in the best way for our dairy members.


"We're pleased to have taken this project across the line and thank all concerned.”


Dairy UK Statement on Dairy Summit

There can be no doubt that the meeting clearly demonstrated the strength of feeling amongst milk producers at the moment. Dairy farmers’ frustrations are wholly understandable. The recent price cuts are regrettable, but we have to remember that industry pricing is market driven and that it is to the market that we must look for solutions.

Forecast demand growth for milk and dairy products is very positive, so the last thing that that the dairy industry needs right now is any restriction in its supply base.

As the Minister said earlier today, the discussions on the voluntary code have undoubtedly made significant progress and Dairy UK is fully committed to seeing these through to a conclusion as quickly as possible. The many advantages of agreeing a voluntary code are fully understood and will go a long way towards addressing the concerns that have been expressed by dairy farmers today.

The current situation is extremely frustrating for everyone involved in the dairy industry, but we have to accept that the UK industry operates in a globalised market environment that is enormously volatile and we cannot insulate ourselves from world market trends.


Wiseman praises resilience of British dairy

Speaking at Dairy UK's Annual Dairy Dinner in London, Dairy UK Chairman Robert Wiseman said: "No industry can rest on its laurels and I know the dairy industry has the determination, resilience, skill and innovation to rise to the many challenges we encounter. We are in for the long haul and are unwavering in our commitment to give the public nothing but the best of British dairy.

"The future growth prospects for our £10 billion industry, on the back of rising demand and a growing global population, are outstanding."

Mr Wiseman said the UK industry was preparing well for the future. He said: "In the first place, consumers love our products – in all their various forms – with something to suit everybody's tastes and dietary requirements.

"We are also an important industry given the number of people we employ in rural communities and the countryside. "Like many other sectors we have to pedal even harder in an acutely challenging economic climate. We continually strive to succeed. The industry is in a better place than it was 12 months ago."

He said both farmers and processors, more than ever before, have a clear focus on competitiveness and a clear understanding that margins are more important than price.

"Markets are tough. Markets are also volatile. Combined with a generally harsh economic climate, this has resulted in recent reductions in the prices paid to dairy farmers. They have fallen back from the record levels that they had reached earlier in the year.

"This is very regrettable, but with increased exposure to world markets, and a reduction in protection afforded by the CAP, this volatility is inevitable, and it will not go away.

"The message from all informed industry observers is that there will be greater opportunities in dairy that probably any other agricultural sector, and that the UK dairy industry has the capability to compete and prosper. This is what we must bear in mind when thinking about the future."



Dairy UK today published "The White Paper 2012" – a report on the UK dairy industry.

The report reveals:

  • 99% of people regularly consumed milk and dairy products (up from 96% in 2010).
  • 96% regularly drank fresh milk (up from 94% in 2010)
  • 95% regularly ate cheese (up from 90% in 2010).

Liquid milk, cheese and fresh product markets continue to grow. Kantar Worldpanel estimates the UK dairy market to be worth £10.12 billion annually, accounting for 12.4% of food and drink sales.

The UK is the third largest milk producer in the EU and the ninth largest in the world.

Milk production continues to rise and UK dairy companies more than match their EU competitors' investment in product innovation. Annual capital expenditure by the UK's major dairy companies has soared to £210 million.

Dairy UK Chairman Robert Wiseman said that the industry was on the threshold of major structural change, driven by the continuing deregulation of EU legislative regimes.

"All the evidence suggests that we are preparing for the future in the right way", said Mr Wiseman. "We are investing in competitiveness, through rationalisation and the attainment of scale – right across the supply chain. We are securing stronger international links, and our product profile is changing to allow us to exploit the opportunities which, increasingly, the free market will provide for us.

"We anticipate new trading relationships emerging from developments, such as the EU Dairy Package, and we are working as an industry to see how these can be implemented in our best interests."


Begg calls for labelling framework

Addressing the All Party Parliamentary Cheese Group at a reception in London last night, Dairy UK Director General Jim Begg urged the Government to support a labelling framework that would allow the industry to respond to changing consumer demands.

"Although we have some of the best cheeses in the world in our current portfolio, more than 700 of them in fact", said Begg, "we are constantly developing new products, and variations to traditional products, in response to consumer demand. And it will be our ability to respond to changing consumer preferences that will be pretty fundamental to our ongoing success.

"What this industry needs from Government is a benign legal environment that allows us to respond to the consumer. As we go forward through issues such as the European Regulation on Nutritional and Health Claims, and the Food Information Regulation, we want to avoid restrictive labelling laws hindering product innovation and development, whilst maintaining traditional varieties."

Begg also stressed the opportunities for the industry to share in the long term growth in global demand for dairy products, predicted by analysts to be around two and a half per cent annually in the next 5 years.

"Most of this growth will be in the east" said Begg, "particularly China, where growth of five per cent is forecast. In the European Union, and the western economies, it's going to be tougher, but our products remain hugely popular with consumers and growth is our objective."



The UK dairy processing industry has reduced its carbon emissions by an impressive 28%, or nearly 75,000 tonnes a year, since 2000.

Data collected by Dairy Energy Savings (DES), which runs the dairy sector Climate Change Agreement (CCA), also shows that in the last 12 months alone, UK dairy processors have achieved a significant 2% reduction in carbon emissions and a 2% improvement in energy efficiency.

DES Chairman Gerry Sweeney said: "The CCA has been a great success and these results show yet again that the scheme continues to drive improvement in the dairy sector."

Mr Sweeney continued: "Whichever way you look at it, a 28% reduction in annual emissions is an enormous achievement. These latest figures show that the industry continues to take its environmental responsibilities very seriously and is maintaining momentum in pushing for further improvements."

Commenting on the Government's decision to extend the CCA scheme, Mr Sweeney said: "This is good news for the industry and good news for the environment. Whilst some details of the scheme are still under review, I feel confident that we will see a scheme that can provide a catalyst to further improvements, whilst leaving the industry with the flexibility to invest."

Energy improvements in the processing sector echo the wider commitment and achievement of the dairy industry, which continues to work on sustainability initiatives such as the Dairy Roadmap, Dairy 2020, DEFRA's Green Food Project and the International Dairy Federation's Global Dairy Agenda for Action.


Innovation must lead, but consumer acceptance is key

Speaking from the Chair at the Dairy NPD Conference in Amsterdam today, Dairy UK Director General Jim Begg told delegates that against a background of a positive market, innovation, new product development, and R & D must drive industry growth in the future. However, acceptance of new technologies by consumers was necessary to sustain the industry economically.

"Globally, demand for milk could outstrip supply in the next few years. Milk production is most developed in the West, but demand is growing fastest in the East. Market volatility is likely to escalate and already commodity markets are challenging added value markets in generating the highest returns. All these factors need to be considered," said Begg, "but within this it is vital that innovation is rewarded by the market.

"However, because of the sheer size and importance of our industry, and the fact that our products are consumed in almost every household, we are an industry that is constantly subjected to the most intense scrutiny, whether for our stewardship of the countryside or the products we bring to market.

"This means that we have to work hard, probably more than many other what you might call manufactured food products, at communicating the scientific development of dairy production, and dairy products, to consumers and Governments. "And, as I say to my scientific colleagues all the time, there is sometimes a belief that once the science has been established, that's the end of the story. That's wrong, it's only the beginning."

<<  8 9 10 11 12 [13

More from Dairy UK: