Shropshire dairy farmers holding on amid a crisis

Farmers today admitted to being terrified about the future and warned that further cuts in the price they are paid for milk over the next 12 months could force them out of business for good.

The situation, for many, has become even worse in the last year alone with, they say, "no sign of it turning around".

About two years ago farmers were receiving about 32p to 33p per litre for their milk.

This month Market Drayton-based Muller Wiseman announced it was dropping its price from February by one pence to 21.35p.

Farmers say it currently costs them about 24p to produce milk.

Many inside the dairy industry put the problems down to farmers producing too much milk.

A former farming campaigner has said he fears that 30 per cent of dairy farmers could quit the industry this year because of falling milk prices.

Paul Rowbottom, who quit as co-ordinator for Farmers For Action (FFA) last year, said he fears famers will soon take matters into their own hands if the crisis in the dairy industry deepens.

Mr Rowbottom, who is currently involved in an animal feed business, admitted that his decision to quit the Farmers For Action campaign left him feeling "gutted" and riddled with "terrible guilt".

But he felt leaving the dairy group was the "right decision" because not enough members backed his calls to renew protests over the ongoing dairy crisis.

He said: "I have been on the road for 25 years and have not seen anything like it. I don't know how farmers are surviving.

"We are seeing livelihoods threatened; you can't carry on like that.

"There is a big difference with farmers getting 29 or 30p, to those who are getting 17 or 18p.

"People are saying they will struggle on to the summer before they sell up.

"There could be 30 per of dairy farmers that leave the industry this year."

Mr Rowbottom said: "Supermarkets have got too powerful.

"They are the ones making the profits. The government should have intervened a long time ago."

He added: "Farmers have got nowhere to go. They have not been able to invest in their farms for years.

"They have had their feet cut from under them.

"To pay for their debts they are trying to produce more milk. That is the problem.

"Something has got to happen. I am worried farmers will start taking matters into their own hands."

Mr Rowbottom said last year the FFA committee agreed to ask members about a return to protests. More than 200 FFA members were polled, but only about 30 agreed to resume direct action.

"I decided there was no point in shutting a dairy processing plant with 30 people. I called for the protest and no-one came," Mr Rowbottom added.

Twelve months ago the Shropshire Star spoke to two dairy farmers in the county about the state of the industry.

At the time they felt cattle welfare would suffer and more people would be forced to work for less money if prices continue to be slashed.

A year on they have admitted things have become even worse – and are fearful about their own futures in the industry.

Matt Jones, of Lower Grimmer Farm, Minsterley, near Shrewsbury, currently milks about 200 cows.

The 35-year-old, whose partner is expecting their first child later this year, said: "The last 12 months have been rubbish, as was predicted. Prices are on the floor so it is just a matter of hanging on if you want to stay in the industry. There's no sign of it turning around.

"All farming is much the same at the moment. There's no money in crops, beef, sheep, or dairy.

"I am at a loss over what to say and what to do, and to identify what the problems are."

Mr Jones said he was reluctant to quit the industry after taking over the farm from his family.

"I may often sound upbeat but that is because I have had time get to get used to what is going on. But in reality I am concerned about what has happened in the last 12 months and terrified what will happen in the next 12 months," he said.

"I took up the farm from my dad and I had plans for what I wanted to do. But I have had to forget investing in anything and have not been able to do any of these things. If you want to stay in the industry you just have to keep going.

"People often say if things are that bad leave the industry, but what else is there to do? This is the job I know about.

"It's a similar scenario to when people go to university and then there are no jobs for them when they are finished."

Mr Jones added: "The Government has to step in before too long. You need a fair return in any business. You have to make at least the cost of production to make it sustainable. We are told the problems are to do with over-supply. Everyone I know is producing more milk.

"But it has got to the stage where they are dropping the price so much it is forcing people out of business. Someone is making money. Where is it all going?

"You have to change your philosophy on how to do things to keep afloat. It won't take much for something to go wrong before I go out of business.

"I am lucky my dad left me with no debts to pay. But what about the poor farmers who have debts? I have lost a lot of enthusiasm for the job and am living one day to the next. I have lost about a third of my income in the last 12 months.

"I employ three workmen who all have families. They would lose their jobs if I went out of business which would be terrible.

"The question everyone needs to ask themselves is, do we want farming in this country?"

Graham Potter, of Wood Farm, Minsterley, near Shrewsbury, milks more than 200 cows and currently has a contract with Arla Foods.

The 36-year-old said: "Things have not really improved at all. The margins are getting tighter and there is still too much milk about worldwide.

"We were told there was not enough milk two years ago, but now we are told there is too much milk. Part of the problem is that other countries won't import milk.

"Things are not looking fantastic at the moment and there could be more drops yet. We are having to jump through a lot of hoops."

Mr Potter said it costs him about 24p per litre to produce milk and they receive 22p.

"It feels like we are treading water at the moment. That's what the job is," he said.

"Fuel has come down, which has been good. But rents remain high.

"We still haven't had our single farm payments. We usually receive them in December to help us tick over. Thankfully banks have been understanding."

He added: "Other farmers have had to leave the industry because of the problems. One farm with four or five generations has had to quit. There are other ways to invest in farms but it means you have got to borrow money."

Mr Potter added: "Margins will come down in the spring when cows go out. There will be lower running costs, which makes a difference. We have got to try and find ways to produce milk more cheaply."

The National Farmers' Union today urged all milk buyers to look at ways to help farmers manage price cuts and create stability.

It comes after union bosses hit out at the move by Market Drayton-based Muller to cut the price it pays its suppliers for milk by one pence per litre from February.

NFU dairy board chairman Rob Harrison said: "Farmers must have some guarantee that milk buyers are doing all they can to manage price volatility for their own businesses as well as their suppliers.

"The Dairy Crest Direct formula was one way to manage this volatility – one that was welcomed and adopted by their farmers. It's concerning that Muller has now given notice on the core and simplified formula contracts.

"We need more milk buyers to offer such mechanisms to help manage volatility for the primary producer and the end user. Over coming months Muller needs to work with its two farmer groups – Muller Direct Milk and Muller Milk Group – to develop initiatives that work for both the suppliers and the company in managing volatility going forward.

"With continued levels of high milk production in the UK and across the world we also need to encourage shoppers to buy British dairy products where possible – something the NFU is leading on with the Back British Farming campaign. We'd like to challenge retailers, food service and manufacturing to take responsibility in doing this too."

Commenting on the NFU's website Les Tape said: "Yet another nail in the dairy farmers' coffin. We should be fighting for the right to be paid at least the cost of production for all farmers' produce.

"No other industry would accept being told what they are to be paid, they would tell their buyers the price they wanted so that they could at least make a profit and be able to continue producing.

"Milk is in a majority of the food that we eat but I haven't noticed a fall in price of custard, milkshakes or other foodstuffs.

"Someone is making a profit out of the dairy farmer and the true facts need to be made transparent so that action can be taken to protect our dairy industry."

Chris Farrell added: "I am trying to back British farmers and will be boycotting Muller products until they pay a fair price to British farmers for British milk.

Another farmer, Rod MacBean, who farms in Aston, near Wem, also recently told the Shropshire Star that farmers face a "grim" future and predicts a lot will quit the industry from February. He said in 12 months no-one would be able to survive if farmers keep receiving low milk prices.

He added that there needed to be more discussions between supermarkets and intervention by the Government to try to resolve the problems.

Muller Wiseman has blamed a further downturn in the market for dairy products for its decision to further cut its costs from February. The move, which it says has been caused by a combination of high levels of milk supply from farms and poor demand for dairy products, brings the price it will pay for a litre of milk to Muller Milk Group suppliers to 21.35p.

It also deals a blow to farmers who began supplying to the group following the acquisition of Dairy Crest's dairies operation on Boxing Day. Muller Direct Milk suppliers – those who moved from Dairy Crest contracts – will now be paid 20.69p per litre.

Muller's agriculture director, Lyndsay Chapman, said: "Our strategy is to add value to the milk we buy from the 2,000 dairy farmers who supply us and we remain committed to offering competitive milk prices and contracts.

"We are very aware of the pressures on farms resulting from the depressed marketplace and have tried to provide stability by maintaining the milk price since September, despite very difficult and declining market conditions.

"However, we cannot fully protect our dairy farmer suppliers from the realities of the market, which continues to be badly affected by high levels of supply and very weak commodity prices. We have therefore had to reduce the milk prices we pay to our farmers by 1ppl, providing the required 30-day notice period."

Muller will hope that it will continue to stave off blockades such as the ones it has experienced before in Market Drayton despite changes to its milk prices from next month.

Protests were held across the region last year as dairy farmers cleared some supermarket shelves of milk, before buying them and handing them out to members of the public. This happened outside Asda in Telford town centre. Cows were also led into another supermarket in Stafford in protest.

MPs, farmers and campaign group Farmers For Action have previously said supermarkets should take a lot of responsibility for the crisis and urged them to pay their suppliers more for milk.

But some supermarkets said they had absorbed the price cut for customers and not reduced the amount paid to suppliers.