Dairy pride means adapting together

The dairy industry’s capacity to revive itself despite formidable challenges was on full display with large crowds at the Dairy Event and Livestock Show at the NEC, Birmingham.

Crippling input costs and inertia in milk pricing may have dented confidence but the resilience of the UK’s dairy farmers is extraordinary.

The milk market isn’t working properly and everyone acknowledges that, but there is a new determination in the air for the industry to find solutions and pull together for survival and growth.

Future challenges

Dairy farmer views on the future remain polarised, which is understandable given the travesty of the UK languishing at the bottom of the EU milk price league.

Some continue to believe the best route is an exit route – Kite Consulting has forecast a 37% fall in producer numbers over the next 10 years.

Those in it for the long haul are convinced that profitability is achievable if all parties in the supply chain are prepared to change.

Talk at the Dairy Event was of the need for everyone – dairy farmers, processors, retailers and co-operatives –  to step up to the plate and adapt so that the UK is able to take advantage of the very real opportunities that lie ahead.

Everyone must be able to make a profit and more focus is needed on co-operation, innovation and production efficiencies.

In a volatile and highly competitive global market, farmers will need to choose their business model and production systems wisely, and a diversity of farm types is to be celebrated not blocked. An over reliance on commodity production for the domestic market is no longer the only way.

New growth opportunities

Added value products, new markets and exports have to be explored more seriously.   
 
Many dairy farmers are responding positively as research by Barclays confirms. It revealed this week that more than one in three (34%) in England and Wales are planning to expand milk production in the next five years.

Their determination to grow includes heavy financial commitments with 24% of the 300 farmers interviewed indicating they would be investing £50,000 to £100,000 on farm. Some 7% plan to invest between £100,000 and £250,000; and 3% expect to exceed £250,000.

Inequalities in the supply chain are deeply frustrating and unjust. Processors and retailers have to find a way of delivering fairer returns and incentivise farmers as a matter of urgency. Without that, there can be no growth, nor long-term prosperity.

Reform

CAP reform and the end of milk quotas presents challenges as well as opportunities. The new EU Dairy Package offers some hope but more promising is the introduction of a voluntary code of practice on contracts, which could help create stronger deals for farmers more quickly.

Other positive news included the proposal to lift skills by using residual funds from the former Milk Marketing Board to set up a Continuing Professional Development scheme.

Proud of Dairy

Dairy UK’s Proud of Dairy campaign has been highly effective in raising the profile of a world-class industry to the public.

It has also reminded us all that defeatism will not help overcome tough conditions nor save our iconic industry. The doubters probably think otherwise, but we should not be prepared to hand over our market to overseas competitors with a higher carbon foot print, poorer animal welfare and fewer dairying skills just yet.

The majority of UK dairy farmers are in defiant mood and long may that continue.

Editorial by FW editor, Jane King