While no one is owed a living, their contribution to the countryside and the rural economy is huge and when they are gone, as I have said before, the hole they leave will be immense. Yet how can producers be expected to stay in business when their costs rise inexorably but the price paid for their milk is back to a level seen in the early 1990s. Some are now getting even less. Today prices, while difficult to keep up with, are quoted around the 20 to 27 pence per litre level. Indeed the spot price is reported down into single figures at nine to 10ppl.
If they are still in business it is likely these spot sellers would also be the ones to weaken any plans by David Handley’s Farmers For Action to withhold all milk from buyers and simply pour it away. Yet spot sellers would surely jump firmly on the bandwagon, sell theirs to the highest bidders and risk sabotaging the boycott. If farmers were loyal to the cause and stuck together, which historically they never do, they could probably sort the whole thing out in a month by simply dumping all milk, for two or three consecutive days, a couple of times over a period.
Yes, it would cost us in lost revenue in the short term. But, if fully supported, it could be recouped by the subsequent return to a fair and sustainable price. What we are getting today is very far from fair or sustainable. It is a loss, as I write now, of anything up to 35% on a product which costs around 31 to 32ppl to produce – not particularly appetising.
I have clear memories of being a reluctant member of Dairy Farmers of Britain and still remember what it must now feel like to be a member of First Milk. Fortunately I found a way to exit before the inevitable happened. Yet today’s likely victims won’t be so lucky because back then there were other buyers looking for milk. Today there are very few, so we need to be very cautious of anyone claiming to want to source our milk just now.
There are reported to be several hundred producers, nationwide, who will, for one reason or another, have no new contract with a milk buyer after this milk year ends. There is presently too much milk around so, for these firms to shed some producers contracts, would be valuable, at least in the short term, since they could go into the market and pick up distressed milk on the cheap. What price farm assurance! So for any affected producers surely there is only one solution. Pack up. Maybe it would be a blessing in disguise for all parties in the UK dairy industry? It would certainly be very life changing for individuals, local communities and for all the old cows sent away.
The processors and buyers keep repeating the mantra that the loss leading retail cuts seen in the supermarkets are being absorbed by themselves rather than passed back to farmers. But, if that’s the case, why has the price to the farmers dropped by around 20%-30% since the autumn? They are being totally disingenuous. The big supermarkets usually have their own small pools of favoured farmers in the low hundreds who they pay extremely well. So they can make their publicity claims of looking after their farmers. But 99% of producers, whose milk they also buy, are not so favoured and are being robbed.
My personal inclination is to give things 12 months to change around, and if they don’t, have a serious review. Trouble is, it has been pretty much unending gloom since the Milk Marketing Board was shut down. Yes, we have had a couple of very short periods when we made a sustainable return, but these have been extremely brief.
So to hear media commentators and experts – including the new boss of Dairy Co, ex dairy farmer Gwyn Jones – suggest we should seek to cut our production costs when we have been doing just that under extreme financial pressure for over 20 years, shows selective ignorance. Gwyn must know, since he has got out, how difficult it has been. All excess costs have been pared long ago. He presumably ran a very tight ship with minimal mastitis, few lame cows/ high fertility and so had things under firm control. We will never know, but he is certainly making more milk out of dairying now than he ever dreamed of when actively involved, yet feels able to give the rest of us such profound advice.
One appreciates the spring flush is an annual short term problem – maybe one needing short term (ten week?) price cuts to overcome. Yet to reduce year round prices when the country is under supplied is brutal commercial greed.
Everyone, in any successful supply chain, has to be allowed to make a fair profit/return on their work or inputs. If not the supply chain breaks down. This is very close now.
With less flooding than of late our temporary sheep visitors are able to graze late growing grass and September sown turnips which last year would have been under six feet of water. They are making a great job and early cereal sowing behind them looks promising.
Yearling heifers on the lower rearing farm were still running out daytimes until mid January, although they are inside now to give the pastures a break. But it has certainly helped keep disease at bay during what has, to date been a very mild winter. Sweating up in barns is not conducive to good health and growth.