Cuts to farmgate milk prices this year are likely to see 2006 remembered as a gloomy year for farmers, but some stability may return in 2007, according to the Milk Development Council's (MDC) new Supply Chain Margins Report.
The news comes after an eventful week in which Britain's number three supermarket, Sainsbury's, announced a new partnership with farmers, and the country's National Farmers' Union said it would collect invoices to reveal the true extent of producer losses.

Concerns have grown that the current milk supply system puts unsustainable pressure on farmers. Nearly three farmers per day have left the sector in the last year, some estimates say.

Reduced market support and prices under the EU Common Agricultural Policy reform made milk prices more volatile in 2006, said Ken Boyns, head of economics at MDC.

“The period of intense change may be coming to an end in the short-term and those who are focusing on improving their farm productivity and maximising the price of their milk at the moment may start to see better returns compared to the present.”

Source: dairyreporter.com