Farmers to skim a profit from new Morrisons milk

Morrisons has attempted to calm the row with dairy farmers, who have brought cows into supermarkets and blockaded distribution centres, by launching a premium milk brand that will guarantee 10p per litre goes to farmers.

The four-pint bottles, which currently cost 89p and will jump to £1.12, was welcomed by the National Farmers’ Union as members held talks with senior managers from Morrisons.

The NFU said it would be writing to other supermarkets asking them to follow Morrisons’ lead as the worldwide oversupply of milk and a running price battle among supermarkets has left many farmers selling milk at below cost price.

However, the union’s former chief economist attacked farmers for what he called “unrealistic” demands.

Sean Rickard said the average dairy farmer is paid £28,000 a year from the taxpayer. He added: “I think it’s unrealistic for anyone in that position to expect us just to pay them whatever price they think is needed to cover their cost of production.”

Morrisons’ new “Milk for Farmers” will hit shelves in the autumn, with the extra money being given to farmers belonging to Arla, Britain’s biggest milk co-operative.

The supermarket also said it had told its suppliers, Arla and Dairycrest that it would not take the reward from any further farmgate price decreases and asked the companies to pass on any benefits directly to the farmers.

Meurig Raymond, president of the NFU president, welcomed the move. He added: “We will continue to urge Morrisons and all retailers to ensure that farmers from all sectors who supply their food get a fair price.”

The NFU said Waitrose, Marks & Spencer, Tesco, Sainsbury’s and the Co-op have arrangements whereby a farmer is paid above the cost of production for milk. It added that Asda, Lidl and Aldi do not offer such deals.

The meeting with Morrisons was also attended by the group Farmers For Action, which has taken cows into supermarkets to highlight its campaign and organised milk trolley dashes, where protesters buy all the store’s milk and distribute it free to raise awareness. Afterwards, the group said it would no longer target Morrisons stores as part of its protests.

Farmers estimate that it costs 30-32p to produce a litre of milk but the average price paid across the UK is 23.66p – down 25 per cent this year.

According to the NFU 256 herds have been driven out of the industry in 2015, with Mr Raymond predicting: “We’ll end up importing more milk and milk product, and that cannot be good for UK Ltd. Our consumers want to see more British food on their supermarket shelves.”

After the meeting, Morrisons said a recent survey had shown that more than half of its customers would be willing to “pay a little more to support British farmers”.