Six hundred dairy farmers in North Yorkshire have decided to fight to increase their prices and prevent some of them from going out of business.

The North East National Farmers' Union (NFU) has launched a campaign to help them escape "straitjacket" contracts with milk processing firms.

The campaign has called on the farmers to submit to the NFU their thousands of invoices, which prove the extra costs they are incurring - costs they are unable to pass up the supply chain, because they are locked into prices for up to three years.

Standard invoices prepared by the NFU, calculating the difference between what they receive for their milk and their rising production costs, began dropping through the farmers' letterboxes today.

Martin Burtt, the NFU's regional dairy board chairman, urged all farmers to provide the information.

He plans, with their permission, to renegotiate deals with milk processors which reflect real costs to suppliers.

Mr Burtt claimed that most milk producers were already operating at a loss, and were in no position to absorb the extra production costs they faced this summer.

A recent survey carried out by the NFU and the Royal Association of British Dairy Farmers estimated that farmers now faced an extra 0.78 pence per litre added to their bills.

So for a farmer whose 80 dairy cows yield about 560,000 litres per year, that means having to fork out an extra £4,368 - and for some that could mean being forced to quit the industry.

Mr Burtt, who farms at Glaisdale, on the North York Moors, said: "Hardly a week goes by without dairy farmers being told by one supplier or another that, with great regret, they have been forced to increase their prices because of higher raw material costs which they can no longer absorb.

"Well, now the boot has got to be on the other foot.

"It is time to enable milk producers to pass on their extra costs, in the same way as other people in the supply chain pass on their costs to milk producers."

He added: "In the short term, a substantial price increase across the board is desperately needed to stop the dairy industry bleeding to death.

"But our overriding aim remains to work with processors and retailers to achieve a sustainable supply chain, that delivers fair prices for good products to all the players in it."

But will this ultimately see the consumer paying more for milk?

An NFU spokeswoman said: "Our researches indicate that there is enough money within the supply chain to pay farmers more for their milk, without affecting prices in the supermarkets and on doorsteps."

A milk processing industry source said: "We do realise that the farmers have problems of increased costs and are sympathetic.

"We are talking to our clients, mostly the supermarkets, but until they agree to paying more we cannot fund the farmers' shortfall."