Stuart Anderson MP has pledged his support for South Shropshire's dairy farmers, who are facing a "severe income squeeze" as milk prices continue to outstrip the cost of production.
- Stuart Anderson MP has pledged his support for dairy farmers.
- It follows volatile milk prices and increasing production costs.
- Stuart wants to ensure farmers get a fair price for their produce.
Stuart Anderson MP said:
"South Shropshire's dairy farmers are the backbone of our rural economy. However, volatile milk prices coupled with increasing production costs is putting immense pressure on them. This situation not only affects farmers but has a ripple effect on our local communities, impacting rural hospitality businesses and future employment opportunities. I want to ensure that dairy farmers get a fair price for their produce. So, I have urged Ministers to review the effectiveness of the Fair Dealings Obligations (Milk) Regulations, which aim to promote fairness and transparency in the sector. I am also urging farmers to complete the 2026 Groceries Sector Survey, which aims to gather insights on how suppliers are treated by the UK's designated retailers including our major retailers."
Farmgate milk prices have fallen to around 35p per litre, down from around 50p earlier this year. This is causing significant financial pressure on dairy farmers, with some processors cutting prices to as low as 30.4p per litre.
As many as ten per cent of dairy producers - or 700 farmers - could leave the industry for good, as concerns grow over investment, confidence, and long-term food security.
The situation is expected to remain challenging, with prices predicted to stay low until the third quarter of 2026. Some farmers are predicting a 40% decline in UK dairy farmers by 2030.
The industry is experiencing consolidation, with smaller farms struggling to complete as the government ploughs ahead with changes to inheritance tax relief for the first time since 1984.
In Parliament, Stuart has asked Ministers to review the effectiveness of the Fair Dealings Obligations (Milk) Regulations, which came into effect in July 2024.
The regulations aim to promote fairness and transparency in the dairy sector by requiring milk purchase contracts to be in writing, specify clear pricing, and allow farmers to challenge prices.
This aims to level the playing field between farmers and milk processors, with farmers ensured fair and predictable pricing that reflects the true cost of production.
However, some farmers are concerned that the regulations are not delivering on their promises, with recent price cuts and lack of communication from processors affecting farm finances.
The National Farmers' Union (NFU) has warned that many dairy farmers face an uncertain future, with some considering leaving the industry due to financial pressures.
Recently, an open letter signed by farming representatives urged processors to act responsibility during what has been described as a "testing period" for the dairy sector.
To support South Shropshire's dairy farmers, Stuart has challenged the government to review whether they are delivering on their promise of transparency and are properly enforced.
It follows concerns that processors are not providing clear explanations for price changes, with some price changes being applied retrospectively affecting farmers' finances.
The regulations also established an Agricultural Supply Chain Adjudicator (ASCA) to oversee compliance and address disputes. The regulations mean that:
- All milk purchase contracts must be in writing and include clear pricing terms
- Contracts must have a clear dispute resolution procedure.
- Processors must give at least 12 months' notice for contract termination.
The Agricultural Supply Chain Adjudicator (ASCA) is responsible for enforcing these regulations and can impose fines of up to 1% of a processor's turnover for non-compliance.
Stuart has urged South Shropshire farmers to complete the 2026 Groceries Sector Survey, which aims to gather insights on how suppliers are treated by the 14 designated retailers including major supermarkets.
The survey is open until 22nd February 2026. It will help the Groceries Code Adjudicator (GCA) better understand retailers' behaviour and ensure compliance with the Groceries Code (GSCOP).
