NFUS milk chief eyes supermarket shelf dominance

Newly elected NFUS milk committee chairman Graeme Kilpatrick, from Craigie Mains, Kilmarnock, tells Rhian Price why he wants better displays and labelling for UK dairy produce.

See also: Are A-B contracts fit for purpose? We ask the experts

Q: What are your plans for the dairy industry in Scotland?

A: While we have yet to hold our first committee meeting for 2015-16 to discuss policy priorities, our focus will be to drive demand for Scottish dairy products at home and abroad.

We want to get the recently announced Scottish brand work pushed forward to meet the launch date later this year and to see clearer labelling across the UK for dairy products – some of which is sub-standard and misleading.

Graeme Kilpatrick

Graeme Kilpatrick

We would like to see increased investment in processing capacity in Scotland and, in line with the EU dairy package, we want to see how producers can increase their bargaining power.

Q: What do you hope to achieve during your career?

A: I think a real achievement would be to see all our dairy products clearly displayed in the middle shelves of supermarkets, not just in Scotland, but across the UK.

That would help establish Scottish dairy as a brand rather than being mixed up with other products from different countries.

In Europe, retailers give pride of place to local and national produce and, after speaking to the English and Welsh farming unions about this, we all agree this is important for the industry.

It is vital we have stronger retailer support sorted out once and for all, as it has been talked about for far too long. It would stimulate the rural economy and it would keep profits within the UK, addressing the serious imbalance in our dairy trade.

Given the strengths in the Scottish milk field, I would also like to see increased processing capacity, matched with increased demand and marketing.

At another level, I want to explore the potential for forward contracting to take some volatility out of the marketplace

Q: What do you believe are the biggest problems facing the dairy sector at the moment? How do you hope to overcome these issues?

A: Problems are numerous. Our product is undervalued. Dairy products, as part of a healthy and balanced diet provide a range of nutritional benefits.

Cashflows in individual businesses are under pressure; volatility is a permanent feature and the marketplace and retailers hide behind dedicated milk pools that only cover the liquid market rather than looking to the whole dairy category.

We need to displace imported products and get processors to look at export markets, which they have not necessarily needed to do in the past.

Q: A lot of Scottish dairy farmers are First Milk suppliers. What are you going to do to support them over the coming months?

A: We need to help First Milk get back to a period of stability because their producers have had a lot of upheaval in recent months.

We have a robust and open relationship with the company and its farmer directors at a board and local level. Specifically, we are working to get funding released to upgrade the First Milk creamery at Campbeltown.

This is for work that has been started, but not completed and this is their biggest processing site in Scotland.

Q: What are your thoughts on A and B pricing models?

A: My own processor Graham’s Dairies started this on 1 February. I am monitoring it closely to see how it works.

It is clear A-B pricing transfers most of the risks back to the farmers and away from the processor.

There are still a number of questions that remain unanswered.

How is the A quota structured? How will it be increased if demand improves?

There needs to be far greater transparency between the processor and the producer. Why should the farmer shoulder all the risk?

Q: Are you optimistic or fearful of life after quotas?

A: I am optimistic about life after quotas as Scotland and the UK has the talent, entrepreneurship and climatic conditions to compete on price with almost any other country in the world that faces the same support systems and regulations as us.

Farmers keep mentioning the likelihood of increased output from other countries, but most of these countries have yet to tackle greater environmental and climatic constraints.

Q: Tell us about your home farm…

A: We farm 258ha and have 360 Holstein Friesian cows. They’re year-round calving, TMR-fed and milked through a 40-point rotary parlour.

We also have 340 head of youngstock and 101ha of arable split between winter wheat, spring wheat, undersown for whole-crop, spring barley and fodder beet.

All home-grown grain and straw is used on the farm.

Q: If there is one thing you could change about the dairy industry what would it be and why?

A: I’d like to see more co-operation and transparency in the supply chain so there is a fairer distribution of the profit margins.

It would also be good for farmers if the role of the groceries code adjudicator is extended to cover indirect relationships, as primary producers are most exposed by bad practice in the supply chain and need a greater level of protection.