As Tesco again displayed its power in the UK food chain with
another profits rise, dairy group Arla Foods joined a growing list
of processors to raise farmgate milk prices.
A lesser increase in prices of energy and commodities compared with
2006 will ease the pressure on processors, according to a new
report by Standard and Poor's.
Milk producers in the UK have given a cautious welcome to milk
price rises announced by Tesco this week, in the latest development
on dairy farmer incomes.
A little piece of Fairtrade Fortnight touched the UK dairy industry
this week as the head of the Sainsbury's supermarket told farmers
he was willing to pay more for their milk.
A group of MPs in the UK have called on the government to step in
over low farmgate milk prices, which they claim are taking ruthless
advantage of dairy farmers.
Supermarkets in the UK have softened their stance on farmgate milk
prices in recent weeks, as public scrutiny of the dairy supply
chain has grown.
Fonterra, New Zealand's largest dairy co-operative, predicted world
commodity prices would continue rebounding strongly over the next
few months as supply and demand tightened.
Rows over dairy price fixing allegations in Scotland took another
twist this week, after Arla Foods UK revealed it would sue rival
Robert Wiseman to recoup lost revenue.
Buyers of Australian dairy products are facing uncertainty over
future supplies and pricing as the country's farmers weigh up the
impact of a prolonged drought on their output.
Shares in dairy firm Robert Wiseman have struggled to recover in
recent days after Britain's competition watchdog accused the group
of fixing milk prices in Scotland.
UK dairy processor Milk Link will pay farmers more money for their
organic milk from this October as the industry attempts to keep
pace with soaring demand.
The current supply glut on the EU butter market will be solved by
more producers leaving the sector, says a Commission report, again
predicting a move away from commodities across the bloc.
Farmgate milk prices have continued to fall across the European
Union and most rapidly in France over the last year, new figures
show, increasing tension between producers and processors.
Rows over farmgate milk prices have intensified in France, with
leading French dairy processor Lactalis accusing its rival Sodiaal
of irresponsibly cutting the price it pays to producers.
Nestle doesn't expect raw material prices to rise further this
year, despite a recent FAO report that forecasts an increase of
over 2 per cent in the world food import bill in 2006.