“Stark inequality” in milk prices for Yew Tree suppliers

NFU Scotland welcomed the news of Müller’s investment, which also includes contractual changes for the Scottish dairy farmers who supply the former Yew Tree site. 

Negotiations by Yew Tree producer representatives will see the new contract take effect from 1st November 2025, rather than 1st January 2026.  

Supplying farmers will have the option to either receive a Müller Direct Skelmersdale price, calculated using a combination of the existing Müller Direct liquid and ingredients price – which uses published global indices – or a Müller ingredients price.

However, although the contract marks an improvement for most producers, it will still leave them receiving a price that is likely to be significantly below the national average, NFU Scotland said.   

Müller said the investment will enhance its liquid milk production capacity, capability and quality, and create a flagship facility for milk drying.

With the capacity to produce 30% more powdered milk, the business will become a major producer and exporter of powdered milk products made in Britain, with milk from British farms, Müller claims.

It will also recruit 40 new staff from control room technicians and forklift drivers to engineers, and management and support.

Stark inequality 

Scottish dairy farmers on Yew Tree contracts have endured some of the lowest milk prices in the industry. 

The Scottish farming union said it has repeatedly raised the alarm about the unsustainable pricing model and the pressures it places on farm viability and farmer wellbeing. 

NFU Scotland milk committee chair Bruce Mackie said: 

“At a time when many milk producers in Scotland have experienced welcome price and market stability, those supplying under Yew Tree contracts have been left behind, struggling to survive on a milk price that is both unprofitable and unsustainable. 

“The average milk price in Scotland hides a stark inequality.”

The gap between the highest and lowest-paid producers is over 16p per litre, and Yew Tree suppliers are persistently anchored at the bottom. 

“This is unacceptable and has pushed several businesses to the brink, both financially and mentally,” he added.

Although the latest announcement is a step in the right direction, the timeline means there will be little immediate relief to farmers who are under immense strain, prompting the union to call for urgent interim price increases.

Disappointing silence 

NFU Scotland president Andrew Connon, who wrote directly to Müller’s UK CEO in June seeking a meeting on this matter, commented: 

“We’ve made it clear to Müller that change is needed, not only to support Scottish Yew Tree suppliers but to provide clarity on the company’s future commitment to its Scottish milk field.”

The union has so far received no reply to its letter or request for a conversation.

“That silence is disappointing,” Mr Connon added. 

“Yew Tree suppliers are family farming businesses currently on the bottom rung that deserve to hear vision and ambition from Müller UK & Ireland on their route to a profitable milk price. 

“It is in all our interests that all producer suppliers are confident of a future in milking cows and I would wish to discuss with Müller UK & Ireland its plans to engage constructively and work with the sector to build a sustainable future for Scottish dairy. 

“Scottish farms offer processors like Müller UK & Ireland strategic advantages in climate resilience and biosecurity, especially during prolonged drought and climate instability. 

“These contributions to national food security must be recognised more directly in the milk cheque.” 

With the new Fair Dealing legislation on milk contracts now in place, NFUS is also calling on major processors like Müller to show industry leadership by offering fair contracts across all their farmer suppliers. 

What Müller has said

Commenting on the latest announcement, Rob Hutchison, CEO of Müller Milk & Ingredients said:

“Since we acquired Yew Tree Dairy, the teams have been working day and night, not just internally, but closely with its customers and suppliers to integrate the Skelmersdale operation into the wider Müller business.

“At the time of the acquisition, we said we wanted to go even further and invest significantly in this location.

“And that’s exactly what we’re doing, we are enhancing our liquid milk production capacity, capability and quality, and creating a flagship facility for milk drying – one of the biggest and most flexible milk balancing sites in the UK.

“With significant investment in the Skelmersdale site, its people and supplying farms, we are creating exciting new opportunities for the whole supply chain, which in turns helps us on our journey to build a better future for British dairy sector.”

Müller reached an agreement to acquire Yew Tree Dairy, based in Skelmersdale, West Lancashire, in June last year. 

The dairy business came under fire again in April this year after Müller asked some farmers to ‘responsibly dispose’ of milk after operational issues at the Skelmersdale plant. 

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