Newsletter Archive:
| Chairman's View |
Now that merger talks have ended, we are completely focused on developing our existing business and progressing alternative strategic options. As always, the ultimate aim of this work is to enable us to pay a sustainable milk price for members. Building on the findings of the Promar report about the rise in on-farm costs (which you will have received last week), our sales teams are negotiating hard with our processor and retailer customers to enable us to deliver a higher milk price. The report calls for a new formula to calculate a consistently fair price; one that takes account of rising production costs, and allows farmers to make a profit so that they can re-invest in their businesses. It is important that we get a mechanism in place to reflect costs in the farm gate milk price. Looking ahead, fertiliser, animal feed and energy costs look set to continue to rise and the impact of NVZ changes will also place a significant burden on dairy farmers. Despite these challenges, I do not think anyone in the supply chain can reasonably argue that dairy farmers should not be paid a fair return that provides some funds for re-investment and the Promar report will play an important role in achieving that objective. |