Can the milk industry still stay afloat?

Farmers and the Morning Star are not usually on the same page politically, but over the past couple of weeks that position has shifted.

Farmers are fighting to keep their heads above water as some supermarkets cut the wholesale price they pay for their milk.

Supermarkets have made cuts of up to 2p a litre. The National Farmers Union (NFU), which has launched an SOS Dairy campaign, is focusing on Morrisons, Asda and the Co-operative because they say that, as of August 1, their milk prices will not cover farmers' production costs of about 30p a litre.

Last year dairy farmers received a little under 29p for every litre they sold, but this is set to fall to less than 25p. The NFU is now urging consumers to shop at places where farmers are paid a "sustainable" price that pays for the cost of production.

NFU president Peter Kendall also said that protests by farmers have been "extremely effective" at raising the issue to consumers "that the farmers who supply milk to these retailers do not receive a price that reflects the cost of production.

"These demonstrations have huge impact. No retailer enjoys being shamed in this way on their own doorstep. Believe me, it is making a difference," he said.

NFU dairy board chairman Mansel Raymond told MPs this week that farmers "will not have the heart to go into the winter" if milk prices stay where they are.

The direct action group Farmers for Action has warned that if prices are not restored to pre-April levels by August 1 they will disrupt delivery.

Speaking to the BBC Radio 4 Farming Today programme, chairman of the organisation and Welsh dairy farmer David Handley said: "If we don't get reinstatement we are looking at disruption of milk supply. That could come in many forms and with us running into something that is very important to many people: the Olympics.

"Part of our action is likely to disrupt. That's unfortunate, but at the end of the day we are in desperation street."

Mr Handley's warning follows announcements in the past seven days from three dairy processing companies - Robert Wiseman Dairies, Arla Foods UK and Dairy Crest - that they also intend to cut the prices paid to farmers.

But a Robert Wiseman Dairies spokesman said: "We fully understand the strength of feeling amongst dairy producers and continue to engage with those with an interest in the dairy supply chain.

"It is important to stress we are not in a position to fund a milk price at the level it was prior to the global collapse in the value of cream.

"It is our hope that the market for liquid milk and bulk cream which is at the core of this issue will quickly find a balance which will allow us to return improved prices to farmers."

The British Retail Consortium (BRC) claimed that supermarkets were the "wrong target".

Spokesman Richard Dodd said: "They're actually the best payers for milk. Currently, 11 of the top 12 best-paying milk contracts are contracts paid by supermarkets."

However despite the protestations of the BRC, supermarkets and suppliers, the farmers' plight has gained the support of celebrity chefs Jamie Oliver and Hugh Fearnley-Whittingstall who have stepped in, writing a letter to The Times in which they said: "The value of milk is something we have all lost sight of. We pay more for bottled water than we do milk - crazy when you think of the work that goes into producing it."

Calling on consumers to boycott supermarkets that continued to use milk as a loss leader, they warned that thousands of family businesses would fail and the landscape would be threatened if the industry breaks down or becomes "super-industrialised." Let's hope the cream sinks to bottom.

For information on how you can suport the farmers' campaign visit www.nfuonline.com/Home/SOS-dairy