SCOTLAND – Müller Milk & Ingredients has announced that it will be introducing new measures to tackle an ‘unprecedented surge’ in Scottish farm milk production that has substantially surpassed local demand for fresh milk from consumers.
Müller says that the company has seen its 230 Scottish dairy farmer suppliers cumulatively increase production since 2014 by the equivalent of 33 litres of additional milk per annum for every person in Scotland.
As a result of the surplus, the dairy processor resolved to find alternative markets for the milk and is currently transporting the milk to England – where markets can be found – resulting in more than 6,000 tanker movements travelling a total of 2.5 million miles each year.
In a move to address the ‘not very sustainable’ impacts, Müller plans to reduce the amount of milk it buys in Scotland.
Over the next one year, the dairy processor will be terminating supply contracts of 14 Aberdeenshire dairy farmers, which the company said are located in areas that present heightened or complex logistical transport challenges.
Müller will also introduce a tiered transport charge for dairy farmer suppliers in Scotland from February 2020 with the fastest expanding dairy farmers shouldering a proportionately higher charge than those who have grown production more modestly.
The charge will apply across all farms and groups except Aberdeenshire farms who already pay a transport charge. Müller will review the charge rates annually with changes in customer demand and farm supply volumes reflected in the review.
Rob Hutchison, Milk Supply Director for Müller Milk & Ingredients said: “We fully appreciate that these measures will be extremely unwelcome and destabilising for our farmer suppliers particularly in the North East of Scotland, but the current situation is unviable and we must act.
“We completed the largest single investment in fresh milk processing in Scotland in more than a decade at our dairy in Bellshill last year and we will continue to do what we can to stimulate new demand for fresh milk.
“But with fresh milk already in 96% of the nation’s fridges and overall consumer demand for the product in marginal decline, the reality is that it is extremely unlikely that this sector will soak up the heightened levels of milk production from farms which we have seen.
“Our farm services team will now work closely with affected dairy farmers and we will do everything in our power to help them adjust to the changes which we must now make.”
The announcement follows a month long review by Müller in which it sought views and inputs from the Müller Milk Group farmer board elected to represent dairy farmers, National Farmers Union Scotland and the Scottish Government.