Fears of exodus from Shropshire dairy farming industry
Tuesday 8th February 2011, 2:15PM GMT.
Shropshire dairy farmers are predicting an “exodus” from the sector unless urgent action is taken to address the £330 million gap between the price paid for milk and the costs of producing it.
The Cost of Milk Production report, published last week, revealed that British dairy farmers are, on average, losing more than three pence on every litre of the 11 billion litres of milk they produce every year.
This figure produces a £330 million gap between production costs and the price received at the farm gate.
Now county farmers and members of the NFU West Midlands are calling for action to increase milk prices in a bid to save their industry.
Shropshire dairy farmer Paul Dutton, from Calverhall, near Whitchurch, said the report highlighted the disparity in the sector and that it was in everyone’s interests to safeguard dairy farming.
Mr Dutton said: “These alarming figures must reinforce the argument that the security of domestic supply of dairy products cannot be taken for granted.
“When our accountants have completed this year end, the cold reality will be an even greater exodus from the dairy industry.”
Brewood farmer Andrew Porteous, NFU dairy board vice chairman, said: “We have all become more efficient over the last 15 years or so but despite this many have gone out of production.
“I am not sure how much more we can do to save ourselves unless those we supply improve the price substantially and without delay.”
NFU regional director David Collier said the figures revealed the desperate situation on many dairy farms and they would not be a surprise to many dairy farmers.
He said: “The irony is that if dairy farmers had received their fair share of available market returns this year, they wouldn’t be faced with such a staggering gap between the price they’re paid for their milk and the cost of producing it.
“It is true that prices have started to move up but some milk buyers have told their farmers to expect only a penny increase.
“That’s a drop in the ocean given the scale of the price problem we are faced with.
“I’m seriously worried that for many dairy farmers it could be too little, too late.”
By Tom Johannsen
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I’ve still never seen a poor farmer.
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Agreed!!!
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Whilst this story in undoubtedly true, I am disappointed that the proposed solution to the problem always seems to be to ensure that the supermarkets (for “the supermarkets”, read “the consumer”) pay more.
For the last four years, I have been saying that farmers need to add value to their product as a means of making a profit, rather than relying on others to do the “after-cow” work and claim the mark-up.
With a huge amount of added value given to milk by Muller in Market Drayton and NOM in Telford, yoghurt products are obviously not the route for a medium sized farmer or a farmers’ co-operative to go, but ice cream and cheese do remain viable options.
I am not an expert on cheese, so assume from the local produce that farmers make their own or have entered into business arrangements with partners who use their milk to make cheese. (The word partner is important here. Any farmer can sell milk to a cheese maker, but will end up with the same problem – low price through competition. The important bit is to partner up and co-invest in the whole product chain.)
But as for ice cream, up until quite recently, I was looking hard to work with a Central – or North Shropshire farmer or co-operative on a project to manufacture ice cream in the county. A litre of milk may lose pennies, a litre of local ice cream will make £££. There are currently no integrated (please note the word “integrated”) producers of ice cream in Shropshire.
If you Google “ice cream”+”shropshire”, you’ll find one small manufacturer (NOT a farmer) but many, many places that serve ice cream – a ready market, many of the outlets ripe to be moved from “processed” ice cream to artisan products.
Unfortunately, I have given up on the idea. I eventually came to the conclusion that there is a complete lack of willingness on the part of Shropshire farmers to consider any business plan that may involve them breaking their reliance on supermarkets.
They may be losing money, but they nevertheless remain fixed in a comfort zone and until they start looking to do a little bit more than hooking cows to milking machines and selling the juice to a large buyer at a cheap price, then the future probably does look less than rosy.
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