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Farmers and ministers to hold dairy farming talks Milk price row: Farmers and ministers hold 'crisis' talks
(about 9 hours later)
The National Farmers Union (NFU) and government ministers will hold talks in London later over the future of British dairy farming. Farmers' leaders and ministers from across the UK are due to discuss what the National Farmers Union calls the "state of crisis" over low milk prices.
The NFU has claimed the industry is in a "state of crisis" and called for government action. Environment Secretary Liz Truss has said the situation is "very serious".
After protests, four supermarkets have agreed to pay farmers a minimum per litre for milk sold in UK stores. Farmers say a reduction in global demand for milk has led to an over-supply in the UK, depressing prices.
Aldi, Lidl and Asda have said they will pay 28p per litre. Morrisons will pay 26p per litre from later this month. After protests, Aldi, Lidl and Asda have said they will pay a minimum price of 28p per litre. Morrisons will pay 26p per litre from later this month.
The industry estimates the average cost of production at 30p per litre - the price Tesco and Sainsbury's pay. Waitrose, Marks & Spencer, Tesco, the Co-op and Sainsbury's already pay more than the cost of production for milk.
Farmers say a reduction in global demand for milk has led to an over-supply in the UK, creating difficult conditions for many farmers. The industry estimates the average cost of production at 30-32p per litre.
Cows in supermarkets Ms Truss will host a summit in London on Monday with farmers' leaders and her ministerial counterparts from Wales, Scotland and Northern Ireland.
Monday's talks follow numerous demonstrations against supermarket chains over the past few weeks. Writing in the Sunday Telegraph, she said she wanted to improve labelling to make it easier for customers to buy British - currently much of the butter and cheese bought in the UK is made from imported milk.
Protests have seen farmers buy up stocks of milk from store shelves and then give it away for free, set blockades at distribution centres and even bring cows into supermarkets. Blockades
Monday's talks follow demonstrations against supermarket chains over the past few weeks.
Protests have seen farmers blockading distribution centres and buying up stocks of milk from store shelves before giving it away for free.
Why has the price of milk fallen?
Why is the milk row happening?
Morrisons, meanwhile, has launched a Milk for Farmers cheddar cheese, which will cost 34p-a-pack more than its standard cheddar and will deliver the equivalent of 10p-a-litre back to farmers who supply the milk.Morrisons, meanwhile, has launched a Milk for Farmers cheddar cheese, which will cost 34p-a-pack more than its standard cheddar and will deliver the equivalent of 10p-a-litre back to farmers who supply the milk.
This will be in addition to its new brand of premium milk announced last week, which will see 10p per litre going to farmers.This will be in addition to its new brand of premium milk announced last week, which will see 10p per litre going to farmers.
Morrisons said it hoped this offer "along with the other initiatives we have announced this week will help our suppliers to better support British dairy farmers".Morrisons said it hoped this offer "along with the other initiatives we have announced this week will help our suppliers to better support British dairy farmers".
Why has milk demand slumped? Matthew Weaver took two cows into a branch of Asda in Staffordshire earlier this month in protest at low prices.
Why is the milk row happening? He told BBC Radio 5live progress had been made: "We feel like we've won the argument actually.
"You talk about pressure from farmers to retailers, but I would like to think that it's more pressure from the general public and the support we have from our customers, the consumers, which we are so appreciative of, because we think that has been the driver for the success we've had so far."
'Price diluted'
Mr Weaver said still more work needed was needed to boost the price of milk used as an ingredient in other products.
John Allen, a dairy industry expert from Kite Consulting, told the BBC small fluctuations in global milk markets had a huge impact on prices in the UK, creating a very difficult environment for farmers.
"The low prices will ultimately mean people will go out of business and then the market will self-correct and probably next year we'll see a significant turn-around and consumers will have to be paying significantly more for their dairy product."
He told 5live that Tesco, Sainsbury's, the Co-Op, Marks and Spencer and Waitrose paid a guaranteed price directly to farmers.
In contrast, the more recent deal involving Asda, Lidl, Aldi and Morrisons will see a guaranteed higher price paid to Arla - Britain's biggest milk co-operative - but Mr Allen said that would probably mean it would be "diluted" and farmers would not see as much of an increase as they might expect.