NON-ALIGNED dairy farmers on the books of Müller UK could be set for a fairer crack of the whip following major changes to its supply contracts set to kick-in from September.

The company are also looking to ditch that 'non-aligned' tag, and instead, refer to producers not on supermarket supply contracts as 'direct suppliers'.

The biggest change is the introduction of a new Müller Direct futures contract option, giving dairy farmers the opportunity to agree a monthly price for up to 25% of their milk volume, for 12 months ahead. The price agreed will be linked to the UK Milk Futures Equivalent.

This Müller Direct pool comprises the 700 of the company’s 1800 farmer suppliers who aren’t currently part of groups aligned to supermarket customers, which Müller accept are the ones currently most exposed to price volatility.

The company is also introducing 'Müller Farm Insight', a new service offering data, welfare tools and benchmarking to help producers businesses.

Müller agriculture director Rob Hutchison explained the motivation behind the move: “There is a lot of uncertainty out there but we are optimistic. Britain remains one of the best places in the world to produce milk and Müller is investing heavily to ensure that consumers will be able to buy more and more dairy products made in Britain with milk from British farmers.

“We want to work with farmers to realise our shared ambitions as the basis of a progressive industry with the security and confidence to invest," said Mr Hutchison. “The steps we are outlining today are early measures which signal our intent.”

NFU Scotland’s milk policy manager George Jamieson welcomed the Müller move, but noted that it was part of a general trend by processors trying to win back producer trust.

“Yew Tree’s contract with its farmers is very transparent and the initiative offering fixed term pricing is excellent," said Mr Jamieson. “Lactalis has made innovative progress in accepting producer collaboration, helping to deliver an annual minimum price agreement.

"There are indications that First Milk’s new governance is willing to embrace all members’ interests more effectively. Arla has a well established democratic process, and an objective pricing model.

“These are all plus points, but there is an urgent need to build on these initiatives," stressed Mr Jamieson. "Scotland lost another 33 dairy farmers according to the recent SDCA report, with more losses likely. Scotland is an ideal place for dairy – we have efficient and committed dairy producers who need a similar commitment from all stakeholders.”

Turning to the issue of farmgate prices, Mr Jamieson welcomed the recent increases by First Milk and Müller, close on the heels of those by Arla and Grahams: "The union believes that as commodity prices remain strong, further moves like these are essential, particularly the dramatic price levels for butter and cream, but also a strong cheese market.

“Processors should pay as much as they can, rather than as much as they can get away with, if they are to inspire loyalty.”