Milk producers this week convened a top level meeting with Sainsbury management to explain the crisis the dairy industry faces. "Sainsbury can be in no doubt that, the way things are at present, they and other major retailers risk losing their supply base of high quality, high welfare milk producers," said Wiltshire NFU chairman Peter Gantlett. The producers were encouraged by Sainsbury's pledge of full support for the British Farm Assurance kitemark and the generic milk promotion campaign later this year. But Gantlett warned: "It's no good the producers being left with the skim while processors and retailers walk away with the cream." Over the past four years, 16% of the 27,000 dairy holdings in England and Wales have gone out of production. This has yet to manifest itself in real shortages, however. UK dairy farmers face an estimated 22.47ppl super levy bill for milk quota overshoot ­ and there is still a market for quota in the coming year, albeit a quieter one. With the intervention milk equivalent price running at 16.361 a litre (March 22), forward lease prices for quota have firmed 0.2ppl to 4.2ppl since last week. At this time last year, the same deal would have cost nearly twice that, at 7ppl. So-called clean' quota has firmed 1ppl since last week to 37ppl, making superlevy avoidance very expensive. So raw milk prices remain low and those negotiating prices based on IMPE calculations face further declines if sterling continues to strengthen. But there is still a market for quota ­ just for the right to stay in production. {{PROVISIONS }}

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