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In some ways we find ourselves in a similar situation to last summer with the need for significant moves on milk price to maintain confidence in the industry. However, the challenge this year is that we will have to achieve price increases without the support of a booming commodity sector. In addition we have the hot topic of food price inflation and its impact on consumers.

I disagree with the way the UK government is handling the price inflation issue at present, with its sole focus on capping food inflation. Clearly the political implications of food price inflation are immense, as for decades policy-makers have relied on supermarkets to drive down prices to deliver more money for other consumer spending. However, I believe that it is impossible to separate the need to tackle food inflation from the need to tackle food security.

Consumers desire for food produced in this country, and dairy foods in particular, isn’t going to go away. Most commentators agree that we are on the cusp of a new era of volatility and rising prices. We therefore need a stronger relationship between the primary producers at one end of the chain, and retailers, the interface with consumer, at the other end of the chain. The old adversarial approach will not work.

Negotiations with all our customers are continuing so that we can increase our milk price. It is a tough environment with First Milk determined as last year, to be a leader in getting price increases at this time. As you know this is the top priority for the Board and the Executive.