21 January 2000

Set up union company to find dairy opportunities

By Shelley Wright

A NEW company, funded by milk producers, should be established by the countrys farming unions to help put dairy farmers back in control of their own destiny.

Quota broker Ian Potter revealed his idea at this weeks Semex conference in Glasgow amid strong support.

Rebuilding UK milk – the theme of the two-day conference – was impossible if everyone remained depressed, he insisted. "Dairy farmers are all doom and gloom, focusing on what is wrong rather than what is right.

"It is time to realise that dairy farmers are no different to anyone else in business. You are ultimately responsible for your own happiness, and you need to work together to solve the problems." Just like milk promotion, he said, market opportunities had to be researched. "If there are opportunities, lets research them fully."

The farming unions should combine to form a new company to do this research. "They did it with insurance, so why not milk?" said Mr Potter. Farmers would fund the business and, if the results pointed to the need for, say, a dairy ingredients business, producers could then be approached for the necessary cash.

Mr Potters suggestion received a positive response from delegates. Phil Hudson, the NFUs milk adviser, said: "We would certainly like to explore this. It is a challenge and we will look at it."

United Milk is getting closer to launching its farmer-owned milk processing business. Chairman, Richard Ashworth, told the conference that a prospectus would be released soon outlining the plans and the cost.

"I am well aware that the UK is already over-burdened with surplus processing and manufacturing capacity," he said. "But dairy factories do have a shelf-life, like any industrial plant, and existing facilities need modernising or replacing."

But Neil Davidson, chief executive of Express Dairies, said the concept of big vertically integrated farmers co-ops had disappeared when farmers leaders had floated Dairy Crest back in 1994.

"To start again from scratch is unrealistic unless farmers are prepared to buy one of the existing processors, which would cost somewhere between £140m and £400m depending on the target company," he said. &#42