Tesco milk contract allows further investment

The possibility of a ground-breaking new milk contract worth 22p/litre has given James Bowditch greater confidence to proceed with vital reinvestment. Ian Ashbridge reports

James Bowditch hopes to be among about 850 dairy farmers that could benefit from Tesco’s long-overdue recognition of the pressures facing milk producers.

Of these, about 350 Arla Foods Milk Partnership members, of which Mr Bowditch is one, should see an increase in the price they receive from the processor.

“We’re very hopeful. Through AFMP, Tesco is said to be looking for 350 farms, and these are expected to be in the south,” says Mr Bowditch.


The prospect of more realistic returns has eased Mr Bowditch’s decision to invest £15,000 in refurbishing one of the milking parlours.

Laverstock Farm, the highest-yielding of the three dairy units, has received no significant investment since before Mr Bowditch took it over and the state of the parlour has become a pressing concern. “We’ve managed to find a second-hand parlour from a producer who has gone out of dairying. The investment had to happen, but at least this has made it easier to give it the green light.”

After a recent district meeting with Arla, Mr Bowditch is initially impressed with the plans for the new contract Arla and Tesco are putting together. “It’s certainly not a half-baked idea. This has come from the very top and we’re told Tesco has set aside £25m for this. It shows that pressure from the NFU and the rest of the industry has had some success.”


The retailer has said the new contract will include milk quality and environmental obligations to “reward the behaviour we’re seeking”, but Mr Bowditch is confident his three farms will already meet and even exceed these standards.

“We know Tesco has done some work with Bristol University on cow locomotion scoring. They’re going to want to know we’re up to standard, but this is everything we strive to do here anyway.”

It seems likely that Tesco will want to ensure no calves from its selected dairy farms will go for export. “But as we’re already on the Blade Farming system for beef, we’re already compliant with this,” says Mr Bowditch.

Although details of the Arla-Tesco contract are not yet finalised, Mr Bowditch says it is hoped that it will be up and running by late summer. “They’ve taken the best of the Arla-Asda, Waitrose and Marks & Spencer agreements. Arla says it is confident it is in a position to deliver this by August.”


As well as gaining a realistic price for his milk, Mr Bowditch is also pleased the new arrangement will streamline his quality assurance audit process.

“Arla is outsourcing its dairy assurance inspections and has put it out to tender. It could be that CMi Certification wins that contract, meaning I would only have to see one person to audit all our arable, beef, sheep and dairy enterprises.”

Mr Bowditch is also encouraged that some of Arla’s assurance staff will become “partnership support managers” under the new contract, helping to build the developing relationship between producers and supermarkets.


Aside from re-investment priorities, Mr Bowditch continues to strive for the level milk production profile Arla wants from its members. “It costs money to do this. We will have to invest in some down-calving heifers for North Bowood dairy in September, which is a spill-on effect from last summer’s heatwave. When we moved from Milk Link to Arla, we didn’t realise just how important this level profile was going to be.”

Overall, Mr Bowditch is in upbeat mood. “If Tesco came and offered Arla suppliers 22p/litre, we’d be bonkers not to take it,” he says. “Nevertheless, we are running a business and I am very keen to see the detail of this cost-plus plan and how it will move forward.”

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