Agricultural Supply Chain Adjudicator: supplier relations improve, but pricing mistrust persists

Speaking to The Grocer, Thompson described a change in industry relationships during the past year. He nevertheless identified continuing “mistrust and suspicion”, especially when prices change.

The pork industry warned this week of difficult conditions ahead as weak demand left thousands of pigs accumulating on farms each week. Dairy processor Freshways has cut its milk payment by 7p per litre, prompting concern that other processors could make similar reductions.

Thompson said the Fair Dealing Obligations Regulations do not govern prices. They should, however, require contracts to explain the operation of pricing mechanisms, allowing producers to understand the signals behind processors’ decisions.

He stressed the importance of communication after what he described as a difficult year for dairy and pork businesses. Both sectors have faced declining prices, higher input costs and severe weather.

Thompson said dialogue in both directions could help farmers understand prospective developments and make plans and business decisions, even when the answers remained difficult. He identified strengthening the industry’s trust and confidence as his continuing priority.