WITH a price announcement still pending from milk giant Muller, dairy farmers' patience with their depressed farmgate returns was wearing thin this week.

Worldwide, market indicators for dairy commodities have soared to levels not seen since the heady highs of 2013, but farmgate prices have yet to respond leading to anger and frustration at farm level, NFU Scotland warned this week.

Actual Milk Price Equivalent (AMPE) and Milk for Cheese Equivalent (MCVE) track the basic wholesale commodity prices for butter, skimmed milk powder, mild cheese and cheese by-products. NFUS acknowledged that these metrics do not set the price, but having risen from a low of around 17p per litre a year ago to almost 37p now, have to be taken into serious account, particularly as farmgate prices have risen by only 7p in the same period to an average of 26 or 27p per litre.

NFUS milk committee chairman, James Rankin said: “By anyone’s arithmetic, this does not add up. Milk buyers failing to pass on market returns is clearly unacceptable in any circumstance, but particularly at a time when dairy farmers are recovering from the deepest price squeeze many have ever experienced.

“There is no reasonable excuse. Production is muted, demand is strong and while the processing and retail sectors can cite concerns about oversupply and being competitive, there is no reason to hold back prices at this time, other than to manage their balance sheets and risk at the expense of farmers," said Mr Rankin.

“NFU Scotland and our fellow farming unions are as ever very open and willing to work with the dairy supply chain to manage risk and opportunity," he added. “We acknowledge that volume management and market competitiveness are real issues, but we are very concerned that farmers are once again not being fairly or respectfully treated in terms of receiving a reasonable reward from such a strong market.”