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More than a dozen farmers in South West England have had their milk supply contracts terminated by the maker of Cathedral City cheese.
Saputo Dairy UK, which also produces Utterly Butterly and Clover spreads, has ended deals with 13 farmers who suppled it with 20million litres of milk each year.
Impacted farmers could now go bust if they cannot find alternative buyers over the next 12 months, having had exclusive supply agreements with the dairy firm.
The UK is now losing about 440 dairy farmers annually, according to the Agriculture and Horticulture Development Board – equivalent to more than one every day.
Saputo, which is based in Weybridge, Surrey, said its decision was a ‘necessary thing to do for the business as we seek to ensure our milk pool is fit for the future’.
But industry experts condemned the move, saying it was yet another blow for dairy farmers who are already contending with unfair pricing policies from food giants.
The National Farmers’ Union is now in talks on the issue with Saputo and Davidstow Creamery Direct, which negotiates prices on behalf of farms supplying the firm.
It comes as British farmers’ campaign against new inheritance tax rules continues and another tractor rally descended on London‘s Parliament Square on Monday.
Saputo Dairy UK is the producer of Cathedral City cheese as well as Utterly Butterly spread
Saputo’s Davidstow Creamery in Cornwall is pictured. The firm bought Dairy Crest in 2019
Labour has insisted it will not make a U-turn on its plans revealed in the Budget to introduce a 20 per cent inheritance tax rate on farms worth more than £1 million.
The changes are due to come into force in April 2026 and scrap an exemption which meant no inheritance tax was paid to pass down family farms.
Diarmaid Mac Colgain, founder of pricing platform Concept Dairy, told The Telegraph: ‘The reason inheritance tax is kicking off is because it’s the final straw for farmers.
‘Every day a dairy farmer goes out of business. A lot of this is because they are being paid below the cost of production. We have seen them crying because they can’t afford to pay their staff.
‘Every month, farmers have no idea how much they are going to get paid by the processor. Imagine going to work every month and not knowing what you are going to get for it.’
The UK is now said to have about 7,100 dairy farmers left in the country.
National Farmers’ Union dairy board chair Paul Tompkins told MailOnline: ‘The NFU continues to offer support to its dairy farmer members in the South West who have been impacted by this move.
‘We are also in conversation with both the processor and Davidstow Creamery Direct, the producer organisation which represents the milk pool and negotiates on their behalf.’
Farmers in their tractors protest in Whitehall on Monday over changes to inheritance tax rules
Farmers in their tractors staged another protest against the Government in London on Monday
A spokesman for Saputo told MailOnline: ‘Saputo Dairy UK has recently made the decision to serve notice on a small number of our Davidstow-supplying farms.
‘This is not something we have taken lightly; however, it is a necessary thing to do for the business as we seek to ensure our milk pool is fit for the future.
‘We are offering the impacted farms support during their 12-month notice periods.
‘We are incredibly proud of our supplying farms and the high-quality milk they produce for our market-leading cheeses.’
Saputo is a major global dairy processer and bought Dairy Crest in 2019 before rebranding it to Saputo Dairy UK.
Earlier this week, Sir Keir Starmer insisted ‘farming is top of the agenda’ for the Government.
It was reported last week that Environment, Food and Rural Affairs minister Daniel Zeichner told a rural conference that farmers are ‘not high on the pecking order’ for the Government.
A file photograph of dairy farmers with their cows in a field in Devon last month
Dairy farmers work in the milking parlour on their farm in Devon last month (file photo)
During PMQs on Wednesday, Conservative MP for Gordon and Buchan, Harriet Cross, asked if ‘given the heartless family farm tax’ did Sir Keir think Mr Zeichner is ‘correct’.
Sir Keir said: ‘Farming is top of the agenda as far as I’m concerned, that’s why we put £5billion to support farmers in the budget.
‘They failed to spend £300million on their watch on farming and we set out our road map, which has been welcomed by the NFU as she very well knows, it was described as long overdue. I wonder who didn’t do it before?’
In September, the Government said the previous Tory government had underspent on the farming budget in England by £130million in 2023/24, £103million in 2022/23 and by £125million in 2021/22 – a total underspend of £358million.
