PLANS to establish a new dairy in Aberdeenshire have been put on hold until next year, amid doubts over the level of support the venture might attract from both milk producers and wholesale customers.

This was confirmed to The Scottish Farmer by North-east Milk Producers Association chairman, Roy Mitchell, who said that the plan could not proceed without concrete support from a consortium of Scottish-based food manufacturers.

On the input side, two of the area’s biggest producers have made it clear that they are not currently planning to supply any new local dairy that might emerge to fill the void left by Muller-Wiseman's retreat from the north-east.

Last week saw the dispersal sale at Carlisle of 153 recently calved cows from the Mair family’s Deveronside herd, at Kinnermit, Turiff. The herd produces 10,000 litres a day but has suffered financially under the 1.75p per litre non-aligned contract transport charge to get their milk to Muller's Bellshill plant.

Said Barclay Mair: “We had a very good sale but sadly it may not be our last. We still have around 200 cows and the way things are going it’s looking more and more likely that they too will be sold further down the line.

“If the new dairy does get the green light then we could do a U-turn, but the way things are I can’t see that day coming and if the dairy doesn’t get up and running then we’ll be gone. We have calculated that the crippling haulage charge of 1.75p a litre to Muller has cost our business around £65,000 a year."

Mr Mair added that his grandfather Stuart had moved to Kinnermit when his own father Kenny snr was just a year old and the family had been dairying there ever since: “We are very sad to arrive at the decision to sell the Holsteins, however, we want to pass on a sustainable business to the fourth generation, something that is not going to be achieved by continuing to milk cows in this region for the foreseeable future, if ever.”

Meanwhile, the biggest producer in the county, Gregor Colquhoun, whose Dendoldrum herd at Inverbervie produces 20,000 litres a day, has stated that he is likely to stick with his Tesco supply contract via Muller.

“Like the others, I contributed to the feasibility study being carried out into another dairy facility but I have my doubts," he said. “Two-thirds of our supply goes to Muller on a Tesco contract – they say that, where we are in the county, they can get to our farm quicker that to some of their farms in South-west Scotland. With our production, we could fill an artic on our own.

“Since the Aberdeen dairy closure by Muller, three producers have gone to Graham’s at Nairn, one has gone into organic production and one has quit," observed Mr Colquhoun. "It would be good for the area if a new dairy comes on stream. But it comes down to the crunch – would I supply it? Probably not.”

Updating on the proposal for a new NE dairy, NEMPA chairman Mr Mitchell, who milks 330 cows at Drimmies farm, Inverurie, said: “SAOS are currently carrying out a feasibility study and this has to be completed before we apply for 30 to 40% from the Scottish Government’s farm processing and management grant.

“We had planned to apply by the end of this month but have put it on hold until April next year. We need to ensure that we have the necessary backing and that our plans are 100%. The aim is to get concrete support from a group of Scottish-based food manufacturers. If we get that and government support then a new dairy will be built," he said.

"It is a pity producers like the Mairs look like being forced out of business," he added. "The area needs a strong milk field.”

SAOS head of cooperative development Jim Booth explained: “We are seeking the support of 15 Scottish-based food manufacturers who would welcome a butter-making facility for bakery products etc. It would be a purely wholesale operation. As things stand much of the butter they need for the likes of shortbread etc is imported.

“Like dairy farmers, food manufacturers are suffering from price volatility, and if they can have their own supply facility this could cut their costs and lead to long-term contracts, both for the manufacturers and dairy farmers.

“A new operation like this would be a great boost for the North-east, but it will only succeed if the manufacturers give it their full backing,” said Mr Booth.