Mr Oakes said: “The core of the business is liquid milk, so they [Muller] will be getting substantial benefits from this cream price. It is about time they passed some of this back to farmers.
“Unfortunately, we all know they are never going to be a million miles away from Arla. If they get too far ahead, retailers would be coming back to them, and if they are too far behind, they will get farmers coming back.”
He highlighted Barbers cheesemakers price for above thresholds litres as reflecting where the markets were, with prices reaching over 34ppl.
The price is based on AMPE -2ppl for June litres supplied above base milk volume plus 8 per cent.
Barbers standard litre price was unchanged at 29.05ppl.
Mr Oakes added it would now be ‘difficult’ for other processors not to follow suit and many farmers would be benefiting due to basket pricing mechanisms.
NFU Scotland milk committee chairman James Rankin welcomed the positive price movements, but said AHDB’s commodity price indicators suggested all milk buyers had ‘a considerable way to travel’.
He warned dairy farmer patience was ‘wearing thin’.
He said: “Milk buyers failing to pass on market returns is clearly unacceptable in any circumstance, but particularly at a time when dairy farmers are recovering from the deepest price squeeze many have ever experienced. There is no reasonable excuse.
“Production is muted, demand is strong, and while the processing and retail sectors can cite concerns about oversupply and being competitive, there is no reason to hold back prices at this time, other than to manage their balance sheets and risk at the expense of farmers.”
Source: FG Insight