Ian Potter, a Derbyshire-based dealer in quotas and author of an industry newsletter, has hinted at plans for a producer strike if prices do not improve substantially over the next month.
Mr Potter was on holiday in Bulgaria this week and unavailable for questions. But before he went away, he wrote: “A group of 14 producers supplying in excess of 22 million litres are meeting pre October 1, as soon as Tesco/Promar declare their hand. The early indications are they may be seeking to do a Stewartry type resignation unless they feel they are getting fair reward and respect.”
Promar is a consultancy which gathers dairy costs information. Stewartry is an area of south-west Scotland where a group of dairy farmers tore up their contracts with big buyers a few years ago and sold elsewhere until they got a better deal. Mr Potter was involved, alongside the Scottish NFU. He is a staunch supporter of the farmers and his hint of rebellion brewing could be seen as a tactical move.
His newsletter sets the scene, reporting a 1.85p per litre increase for suppliers to Wisemans, from October 1. It says the hope is that the Wisemans move “will kick start a raft of similar increases”.
It says: “This autumn’s milk price increases will be crucial and if farmers feel the market is not working, there is plenty of evidence that several are prepared to take their chance with a commodity-type contract which has a transparent pricing formula. The sacred liquid market contracts and retailer-aligned contracts are set to be the main casualties.”
Mr Potter is referring to the widespread belief that British farmers would be better off selling into the international market for milk for cheese, butter and cooking ingredients, rather than providing fresh milk for drinking. But he warns against “glistening contracts from businesses who have little or no track record”.