The main milk buyer in the north and north-east has announced a review of its operations amid concerns of a growing milk surplus in Scotland.
Muller Milk & Ingredients has warned its 230 Scottish farmer suppliers that a 25% surge in farm milk production is not supported by growth in demand for fresh milk products in Scotland.
The dairy giant says the increased production is not sustainable and has significant environmental consequences, with almost 200 million litres of fresh milk carted down south for processing each year due to a lack of market for it in Scotland.
“Fresh milk is loved and in 96% of the nation’s fridges, but consumption is marginally down year on year,” said Muller’s milk supply and operations director, Rob Hutchison.
“Production from Scottish farms who supply us, however, is up by 25% since 2014.
“As a result, Muller is transporting 180m litres per annum – equivalent to 33 litres of additional milk for every person in Scotland – to our dairies in England, where we can find a market for it.”
He said the financial and environmental costs associated with moving this volume of milk were substantial.
“We must work urgently with farmers who supply us and other industry stakeholders to review a range of measures to address this increasingly unsustainable situation both in the short and longer term,” added Mr Hutchison.
He said the company will discuss the issue over the next month with its elected farmer board and other industry stakeholders.
Measures to resolve the problem will then be announced once the review period is complete.
NFU Scotland’s milk committee chairman, John Smith, said: “This announcement will be a real concern for all Muller producers in Scotland.
“Officeholders and policy staff at NFUS have already taken a number of calls.”
He said the union would seek a discussion with Muller management at the earliest opportunity to seek a better understanding of the short and long-term strategy for the company’s supply chain in Scotland.