The dairy producer organization Agaprol, the largest in Spain, has decided to take Lactalis to court to pay the production costs and is demanding a new contract at 0.37 euros / liter to comply with current regulations.
As Agaprol explains in a statement, Lactalis is the dairy industry that collects the most milk in Spain and that, at present, pays a price “well below the production costs” faced by farmers.
“Agaprol negotiated with Lactalis until March the conditions of the contracts and although its partners were forced to sign them in view of the situation of running out of collection, the producer organization OPL showed its disagreement with the proposed price insofar as, it does not cover production costs as established by the Law of the Food Chain “, they specify.
To this they add that Lactalis’ refusal to renegotiate and modify the conditions of the contracts “because they are signed” is not valid because the ranchers signed them “outside the autonomy of their will.”
Agaprol assures that it informed Lactalis of this situation during the “numerous meetings” held during the two months that the negotiation lasted and, once it was finalized, it again informed Lactalis in writing that the contract did not cover the production costs of the farmers and that it could breach the regulations in force since last year.
Agaprol is now demanding that the court urge Lactalis to sign a new contract with its partners to cover the production costs incurred and to recalculate the prices paid for the contract in question.
In the opinion of Agaprol OPL, the new contract should include the official data provided by the ‘Study of the liquid milk value chain’ made public by the Ministry of Agriculture. The aforementioned report establishes that until the first half of 2020 the production costs in a typical livestock farm in Spain were 35.65 euros / 100 liters, also taking as a reference the costs of the years 2018 and 2019.
The rising cost of feed from the moment the “still photo” of the Food Chain Observatory report was made until now has led to an increase in production costs for farmers of 3.7 euros / 100 liters.
To this they add that the electricity bill has also experienced “very important increases” this year, which are calculated at 0.75 euros / 100 liter of milk produced. The same report also reveals that farmers have “other income” attached to dairy production of 2.96 euros / 100 liters, a figure that would leave the cost of final milk production, which should cover the next link in the Food Chain , at 37.14 euros / 100 liter.
Agaprol OPL ensures that it will continue to defend the interests of its partners and compliance with current regulations “through all possible negotiation channels and seeking, where appropriate, the protection of the courts in the face of the unsustainable situation suffered by the beef sector. milk”.
The organization claims that the latest increases in the milk price distribution chains on the shelves have to affect the price paid to farmers and regrets that so far, only a minority of the industries have transferred it to their contracts.