Cheesemakers fears not yet fulfilled, but…
Farmhouse cheesemakers have had a difficult first year in the deregulated milk market. Philip Clarke reports
A LITTLE over a year ago, in the run-up to vesting day, Devon-based farmhouse cheesemaker Mary Quicke predicted that "blood would hit the carpet" when higher milk prices struck home.
In fact the past 12 months have been relatively free of such spillage. But Ms Quicke stands by that prediction.
Her family has been milking cows and making cheese at Home Farm, Newton St Cyres, near Exeter, for over 400 years. Some 370 Holstein Friesians produce about 2.75m litres a year, with another 2.5m litres bought in from Milk Marque.
From this, the partnership makes 550t of cheese, 95% of it traditional farmhouse Cheddar – most of it branded. The company employs a staff of 35.
Together with other cheese manufacturers, Quickes has born the brunt of last years milk price increases, paying 4p/litre (20%) more for its raw material.
The Quickes considered buying milk direct from local farmers. "But our aim now is to produce as much as possible from our own milk," says Ms Quicke. "We could not offer them a guaranteed contract, so we went to Milk Marque instead."
Unlike some other cheesemakers, who had their milk supplies scaled back, Quickes paid the extra for a tailor-made contract. This is based on "ex-farm" deliveries, with a 0.5p/litre premium to guarantee hygienic specifications and a minimum protein content.
One consequence of this move to Milk Marques ex-farm profile is that the farms own herd has had to shift calving pattern.
Previously Quickes ran a summer calving herd, so that peak production coincided with the old MMBs trough. Now, faced with a more level intake, they have moved to spring and autumn calving, albeit at considerable cost in terms of the extra milk they have had to buy in.
Raw material costs
Faced with higher raw material costs (about £400/t more), Quickes has had to set about recouping as much as possible from the market.
With Cheddar taking up to 12 months to mature, this has provided some leeway for cheesemakers to achieve a higher price. Quickes grasped that nettle early, lifting its list price by £300 to £4550 for Quickes Traditional at the start of the year.
But maintaining this has not been easy, with the supermarkets showing a growing enthusiasm for special price promotions on a range of cheeses.
The impact has also been to damage sales, and the company has had to cut production by 5% this year, leading to under-utilisation of capacity.
In response, Quickes has increased its marketing effort. For example, it is now selling 1t/week to the French. "This all costs time and money, but it is the only way forward in the current trading environment," says marketing manager Tom Langdon-Davies.
But the partners remain concerned for the future of farmhouse cheesemaking. "For many, the 12-month respite is over and cheese made with the higher cost raw material is now coming to market," says Ms Quicke. "It is not always profitable and I am aware of several who have stopped buying in extra milk, and some who have shut down production all together."
Unless more are to exit the business, milk prices will have to ease in the future, she claims.
"We now have some of the most expensive milk in Europe," she says. "It has only been sustainable so far because butter prices have been so firm and because sterling has been so weak." The two have combined to protect the UK from a flood of imports.
This cannot be relied on in the future, she says.
especially as low-cost producers from around the world gain access to EU markets.
As such, she believes dairy farmers should be using the extra income they are receiving now to improve their efficiency for tomorrow. "The great sadness is that already so much of the benefit of deregulation has been wasted in the form of inflated quota prices."