6 July 2012
Last updated at 10:14 ET
Farmers have been meeting to discuss how best to force a reversal of recent cuts in the milk price
Farming unions have demanded the reversal of recent cuts in the price of milk as hundreds of UK dairy farmers prepare to meet in London next week.
Farmers are considering protests and disrupting supplies in response to the price cuts that they say are driving small dairies out of business.
Major milk firms cut prices in the spring, and more cuts are on the way.
“We are in desperation street,” David Handley from Farmers for Action told the BBC.
The National Farmers’ Union said it would support any action that was peaceful and legal.
Hundreds of farmers have gone out of business in recent years, and following recent price cuts by milk processors, the industry says it has had enough.
The NFU and the Tenant Farmers Association have called for all price cuts since 1 April to be reversed by 1 August.
They have also called on dairy farmers to turn out “in force” in London next Wednesday at a “crisis summit”.
“The catastrophic cuts will drive farmers out of the dairy industry and we are united in our demand for an immediate reversal of recent planned cuts,” the unions said.
“There has been an unprecedented outcry of anger and frustration among farmers.”
Robert Wiseman, Britain’s biggest fresh milk company that was taken over by European dairy giant Muller in January, cut the price of a litre of milk by 2 pence in June and plans to cut it again by 1.7p in August.
Wiseman’s standard litre price would then be 24.73p. This is well below the cost of producing a litre of milk, farmers say.
Other milk processors in the UK announced price cuts last week.
In the dairy industry, the processors set the price they pay farmers for their milk.
They say they have had no choice but to pay less for the product, because the price of cream on the commodities market has fallen sharply in the past 12 to 18 months.
Milk processing in effect involves skimming off cream to make milk more palatable for consumers. So the processors say if they are making less money selling cream, they have less money to pay for the milk.
Some farmers say they have no option but to take direct action unless all price cuts since April are reversed.
“There are a number of things we are working on, such as disrupting the milk supply,” said Mr Handley.
“We just want a fair share of the supply chain and direct action, in whatever form it takes, will be carried out to make sure we get the ultimate gain, and that is to get our money back which I think has been robbed from us.”
Farmers can also deal direct with retailers such as supermarkets, which have their own processing facilities.
According to the NFU, Tesco and Sainsbury’s offer farmers “good” contracts, whereas those offered by Asda and Morrisons are “not so good”. Supermarkets will often buy milk directly from farmers and also through third-party processors.