Co-operation under review
HOW producers can influence the price of milk through co-operation is what an MDC-funded study currently under way aims to find out.
The results will be the topic of a Spotlight on Profit forum at this years European Dairy Farming Event at Stoneleigh, Warks, on Thurs, Sept 21.
Andrew Fearne and Stephen Bates of Imperial College at Wye, Kent, began the project just four months ago.
"Our vision is a vertically integrated supply chain with producers working in harmony rather than conflict with their buyers," says Dr Fearne.
"We are looking at various cases of co-operative ventures in Holland and France, from which we may learn how to and how not to do it in the UK. However, we have found reasons why we cant just follow the Dutch example."
But the UK needs to move forward, and the aim of the project is to ask how, he says. He hopes to explore some options which may be applied successfully here.
Dr Fearne believes the solution will require innovation to give long-term competitive advantage, such as producers entering into partnerships extending in to the food chain.
Milk producers need their customers to treat them differently. At present processors have a queue of producers all offering them the same raw material.
"But there must be a distinction between trading commodity products on the bulk market and longer term contracts for value added products which are co-ordinated with suppliers."
The latter may be a riskier investment, but offers the possibility of greater returns, says Dr Fearne.