WHILE SOME supermarkets have agreed to pay farmers more for their milk, the price shoppers pay is still more than three times as much as dairy farmers receive.
As a result of recent price cuts many are going out of business and others are struggling to keep their heads above water.
There is some help but not much. On Monday the NFU welcomed moves by two supermarkets. The Co-operative and Morrisons – both of which have branches across Wealden – plan to increase the premiums they pay milk producers. These follow the #SOS Dairy Summit in London on July 11 and a series of demonstrations outside processing plants.
Joining calls for buyers to at least cover dairy farmers’ costs of production have been celebrity chefs including Jamie Oliver, the CPRE and the WI.
As more dairy farms have to close customers will have to rely on imported milk or milk from intensively reared animals. This raises concerns about welfare standards. The UK’s are probably the highest in the world where dairy animals are grass-fed in summer and live longer lives than their ‘factory farmed’ equivalent.
Guy Brickell from Froghole Farm has 160 Friesian type cattle on 550 acres at Witherenden near Mayfield.
He said: “Even before this recent problem we had been hit by two earlier price cuts. Some are facing bankruptcy and being forced to sell farms.”
He sells to a co-operative but to safeguard his herd and his livelihood he has started a new project selling direct to Cross in Hand award-winning cheesemakers Allsop and Walker.
He went on: “We had to diversify and thought this was a good way to protect our business. We went down the organic route but had to give that up as people would not pay the organic premium. We care for our herd. They are not high-yielding, factory performance cows which normally can only be milked until they are four or five and are then culled. Ours go on until they are ten or 11 and they have access to the best grassland. The herd was set up by my grandfather and the longevity is in the genetics of the herd. The family has farmed here since the 1950s. The price reduction was a body blow and hit us very hard. We tried to spread our costs by expanding from 90-100 to 160 cows but it’s costing us 30p to produce one litre of milk and we are being paid 26.5 pence.”
Third generation dairy farmer Jo Delves from Burnt House Farm near Horam farms 200 head of Friesians. He sells direct to Tesco and the supermarket pays him production costs plus. At present his production cost is 25p per litre and Tesco pays him 29.5 pence; an improvement on Guy’s figure but not a profit to shout from the rooftops.
He explained that when milk prices collapsed Tesco set up a production pool to guarantee stocks with dedicated suppliers. He explained other major retailers such as Sainsbury’s operate a similar system. But he went on: “Our production doesn’t fill their litreage requirements so they have to acquire the rest from elsewhere. There is no traceability on milk. The trouble is, it’s a global market now so if New Zealand over-produces milk it affects us. We have to monitor costs very stringently.”
NFU president Peter Kendall praised The Co-op for ‘the company’s recognition of the real difficulties being faced by British farmers this summer.’ After Morrisons’ move, the NFU president said it was now ‘critical that other retailers and major buyers of milk respond.’
Morrisons recognised the exceptional pressure on farmers and said it would negate the impact of price cuts made by processors by paying an additional 2p-a-litre premium for every litre of milk that it buys plus an 3p per litre because of extreme weather. These payments will be reviewed in late October.