Farmers Escalate Milk Price-Cuts Protest

The impact of the price cuts ‘amounts to a combined profit warning for the overwhelming majority of dairy farmers in this country’ and reports indicate that supermarkets are to be targeted by blockade-protests from farmers. In some cases, given the fact that cows need milking daily, farmers plan to distribute the undelivered milk free-of-charge outside supermarkets.

In fact, in 2009 continental farmers resorted to more extreme measures such as spraying three day’s supply of unused milk onto fields and at the police.

A call to action
Yesterday, an unprecedented meeting of farming unions called for the immediate reversal of milk price cuts imposed on UK farmers since 1 April. The NFU chaired the meeting of leaders from NFU Scotland, NFU Cymru, Tenant Farmers Association (TFA) and Farmers for Action who came together in an industry show of strength after a catastrophic three months for the sector.

The representatives called for all milk price cuts imposed on farmers since 1 April to be restored by 1 August. They also plan a crisis summit in London on Wednesday 11 July.

Impact on consumer-retailer-supplier relationship
As savvy consumers, we need to run the numbers and realise that constant pressure on shelf-prices pushes back up the supply chain and in the case of clothing can eventually end with child labour abuses in third world countries. In a similar way, relentless pressure on milk prices can result in farmers going bust.

As savvy retailers, we need to run the numbers to ensure that in attempting to meet real consumer-needs, on-shelf availability is not traded off against the need for competitive pricing.

As savvy suppliers, we need to run the numbers to ensure that the total-offer-package meets consumer need better than available competition. In other words, we need to strip back any aspect of Product, Presentation and Place that may be superfluous to consumer need, and sell at a Price that represents better value than the competition.

Going forward
We then need be able to apply a similar numbers-based rationale in assembling a needs-based trade package that enables us to negotiate ‘fair-share’ deals with trade-partner retailers. These are retailers that can appreciate, and accommodate, the realities of each stage of the demand-supply chain in running efficient and effective routes to savvy consumers, in an open, needs-based market environment, offering a package that represents better value than the competition…..

All else is detail.