Major UK Milk Processor Muller Cuts Ties with 26 Dairy Farms
Source: The DairyNews
Muller, a major milk processor in the UK, has recently notified 26 of its smaller dairy farms across England and Wales that they will be dropped from its supply chain unless they can significantly increase their milk production volumes.
This move comes at a particularly difficult time for the dairy sector, as many farmers are grappling with milk prices that remain stubbornly below production costs.
The decision was communicated to Farmers Weekly by a spokesman for Muller Milk & Ingredients, who explained that these farms were not meeting the company's stringent standards of sustainability and welfare or were simply producing too little milk. "We have identified a very small number of supplying farms who are not continually meeting our high standards or provide us with low volumes of milk," the spokesman stated.
To mitigate the impact, Muller is providing a 12-month notice period and has offered to support the affected farms throughout this transition. Discussions were held with each farm prior to the notices being issued, and there is a possibility for these decisions to be reversed if mutually agreeable terms can be found.
The timing of this announcement coincides with the introduction of new legislation aimed at creating fairer and more transparent contracts between farmers and processors. The Fair Dealings Obligations (Milk) Regulations, which came into effect earlier this month, are designed to improve contract conditions for dairy farmers. These regulations will apply to all existing milk contracts by 9 July 2025, potentially offering some relief to small producers.
One Derbyshire farmer, who spoke to BBC’s Farming Today programme, highlighted the personal impact of Muller's decision, revealing that he is now forced to sell his dairy herd after being informed that he would need to nearly double his milk production to maintain his contract. This case exemplifies the severe challenges small dairy farms face in adapting to the demands of large processors amidst unfavorable economic conditions.
The situation underscores the broader issues within the dairy industry, where smaller producers are often at a disadvantage due to high operational costs, poor margins, and elevated interest rates that hinder their ability to expand. The recent legislative changes could provide a framework for more equitable relationships between dairy farmers and processors, but the immediate challenges posed by decisions like Muller’s highlight the ongoing struggles within the sector.
The decision was communicated to Farmers Weekly by a spokesman for Muller Milk & Ingredients, who explained that these farms were not meeting the company's stringent standards of sustainability and welfare or were simply producing too little milk. "We have identified a very small number of supplying farms who are not continually meeting our high standards or provide us with low volumes of milk," the spokesman stated.
To mitigate the impact, Muller is providing a 12-month notice period and has offered to support the affected farms throughout this transition. Discussions were held with each farm prior to the notices being issued, and there is a possibility for these decisions to be reversed if mutually agreeable terms can be found.
The timing of this announcement coincides with the introduction of new legislation aimed at creating fairer and more transparent contracts between farmers and processors. The Fair Dealings Obligations (Milk) Regulations, which came into effect earlier this month, are designed to improve contract conditions for dairy farmers. These regulations will apply to all existing milk contracts by 9 July 2025, potentially offering some relief to small producers.
One Derbyshire farmer, who spoke to BBC’s Farming Today programme, highlighted the personal impact of Muller's decision, revealing that he is now forced to sell his dairy herd after being informed that he would need to nearly double his milk production to maintain his contract. This case exemplifies the severe challenges small dairy farms face in adapting to the demands of large processors amidst unfavorable economic conditions.
The situation underscores the broader issues within the dairy industry, where smaller producers are often at a disadvantage due to high operational costs, poor margins, and elevated interest rates that hinder their ability to expand. The recent legislative changes could provide a framework for more equitable relationships between dairy farmers and processors, but the immediate challenges posed by decisions like Muller’s highlight the ongoing struggles within the sector.
