A new front in the milk price wars has been opened, with farmers threatening to take their milk off British supermarket shelves and sell it on the world market instead.
Farmers for Action, which has staged a series of high-profile protests at supermarket depots in recent months, claimed this week it was planning to build a major milk processing site to convert liquid milk to powder, which it would then export.
Given the high global prices for dairy powder at the moment, this would generate far more money for British dairy farmers than if they continued to sell their milk to the supermarkets, the group said.
FFA chairman David Handley said the group had already "crunched the numbers" on building a processing site and was likely to form a dairy co-operative with its own contracted farmers to fund the venture. He added FFA hoped to have funding in place, and a site earmarked, by the end of the year.
Dairy farmers had sat back for too long "moaning and groaning" about low prices, with no business plan in place but that was about to change, said Handley. "For the past 10 years, dairy farmers have been price takers, not price makers. We want to change that."
Although a move into powder would take "several million pounds" of investment, "you've got to realise that dairy farmers are in a situation where a small investment out of their milk price is going to have a long-term benefit for them," Handley added.
FFA plans to build its processing site in the north of England, to complement Westbury Dairies near Bath, which is currently the UK's biggest dairy powder factory. "Those two plants could work in harmony together, and we see that we could be a major exporter of some of the world's best products," said Handley.
FFA ultimately aimed to take about 30% of the UK's liquid milk out of the UK market and turn it to powder, and had already started talking to manufacturers with experience of drying milk, he added.
A move by British farmers into powder would echo the model of the New Zealand dairy industry, which already converts the vast majority of its milk into milk powder, making it a successful global exporter of the commodity.
Global dairy prices have soared in recent months, with butter and milk powders hitting their highest prices since autumn 2007 [Mintec]. Increased demand from BRIC countries as well as supply shortages have been the key drivers behind the increases.
Farmers for Action, which has staged a series of high-profile protests at supermarket depots in recent months, claimed this week it was planning to build a major milk processing site to convert liquid milk to powder, which it would then export.
Given the high global prices for dairy powder at the moment, this would generate far more money for British dairy farmers than if they continued to sell their milk to the supermarkets, the group said.
FFA chairman David Handley said the group had already "crunched the numbers" on building a processing site and was likely to form a dairy co-operative with its own contracted farmers to fund the venture. He added FFA hoped to have funding in place, and a site earmarked, by the end of the year.
Dairy farmers had sat back for too long "moaning and groaning" about low prices, with no business plan in place but that was about to change, said Handley. "For the past 10 years, dairy farmers have been price takers, not price makers. We want to change that."
Although a move into powder would take "several million pounds" of investment, "you've got to realise that dairy farmers are in a situation where a small investment out of their milk price is going to have a long-term benefit for them," Handley added.
FFA plans to build its processing site in the north of England, to complement Westbury Dairies near Bath, which is currently the UK's biggest dairy powder factory. "Those two plants could work in harmony together, and we see that we could be a major exporter of some of the world's best products," said Handley.
FFA ultimately aimed to take about 30% of the UK's liquid milk out of the UK market and turn it to powder, and had already started talking to manufacturers with experience of drying milk, he added.
A move by British farmers into powder would echo the model of the New Zealand dairy industry, which already converts the vast majority of its milk into milk powder, making it a successful global exporter of the commodity.
Global dairy prices have soared in recent months, with butter and milk powders hitting their highest prices since autumn 2007 [Mintec]. Increased demand from BRIC countries as well as supply shortages have been the key drivers behind the increases.
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