MILK producers supplying Arla Foods amba had some good news this week, with the announcement that their price is going up a penny a litre from September 1 – but there was no such good news for those with the Fresh Milk Company supplying Lactalis at Stranraer, who will have to wait until October for a rise.

The Arla on-account price for conventional milk will increase by 1.25 eurocents per kilogramme, which when applied to the UK standard litre for conventional milk takes it to 20.05p.

Arla director Jonathan Ovens said: “This is welcome news for our farmer owners who continue to face challenging times on farm. Our increase will hopefully reaffirm their confidence in the dairy industry, after 18 months of falling prices."

But following three stormy Lactalis producer meetings held this week in Ayr, Stranraer and Dumfries, its managing director, Mark Taylor, refused to budge on the call by producers, backed by Farmers For Action Scotland, to make a backdated increase for August.

According to Mr Taylor the market wasn’t returning sufficient income to the company to justify paying producers more at this stage, a decision which resulted in some Lactalis producers tendering their resignation.

One producer who resigned on Tuesday night following the Stranraer meeting was local producer John Watson, of High Mark farm, who is FFA’s Scottish spokesman.

Said Mr Watson: “We have been calling on Mr Taylor to put the August price up but he refused. We have been struggling on the 18p a litre for months now. We can’t wait until October to see a 1p rise which won’t be in our banks until December.

“Many producers don’t think that Rory Christie, chairman of the FMC, has pushed the case for an increase hard enough, and apart from my own resignation, other resignations have been handed in. Cheese is currently selling at £3000 a tonne, and we are getting 18p. Lactalis are not playing the game.”

Mr Christie told The Scottish Farmer: “The meetings were emotional but that is fair enough given the circumstances producers find themselves in. I can understand producers resigning. Many are in financial distress and feel they can get a better deal elsewhere. I have to accept that.

“As chairman of FMC I have a responsibility to try and get a deal for those producers wanting to stay. We need the milk field in this area to expand not contract. Mark Taylor knows what he has to do on the price front. I hope he can deliver.”

NFU Scotland’s milk policy manager, George Jamieson, commented: “It is now very clear that the market has moved fundamentally, with global, European and UK commodity markets all positive, and signals are all pointing to higher prices. Consumer product prices will quickly follow commodity prices and that means prices must rise quickly.

“The Arla price rise is welcome, if disappointing in scale. That said, as their objective pricing structure is agreed by members, it has to be accepted that it reflects Arla’s markets which are global.

“However, the challenge for Arla and all other processors is what efforts are they making to persuade the retailer and end user to lift prices? We know dairy products have been sold forward cheaply, but producers cannot continue to produce at prices that are still way below the cost of production."