David Cotton, chairman of the Royal Association of British Dairy Farmers, sets out where he thinks the dairy industry needs to be by 2021 ahead of the Dairy Event and Livestock Show (6/7 Spetember):
• Eight-and-a-half thousand dairy farmers, average herd size 200 cows, average yield 8,500 litres, 14.5 billion litres total UK production.
• TB is under firmer control and badger population growth has finally halted. Managed culling has occurred in the worst-hit areas, regional movement of stock is being carefully monitored and the skin test is now more reliable so that false readings have been reduced as has unnecessary cattle slaughter.
• The BVD eradication programme is well underway following leadership of the Scottish administration and UK Cattle Health and Welfare Group introducing the correct protocols.
• Johne’s in the national herd has returned to less than 30%. Recording is compulsory for all producers on dedicated milk supply contracts. Only one certified laboratory remains to carry out all the sampling thereby facilitating herd monitoring of all recorded herds.
• Welfare has stepped up. All milking cows have access to grazed grass in part of their lactation to meet with their milk contract’s requirements.
• Cow management knowledge has moved on. Every cow has a tracker that monitors her heats, and time spent eating, walking and lying down. All lameness and any digestive problems are detected early, service dates are easily managed and our vets simultaneously receive this information too.
• Youngstock management is just as important as cow management. Many ex-dairy farmers have established specialist heifer rearing units. Most heifers are bred from sexed semen.
• The processing sector comprises one major co-op owned by UK farmers, one co-op owned by European farmers and another company owned by a multi-national player looking for category management on a global scale. Think PepsiCo, Coca-Cola and Kraft. One of them is on the cusp of joining the UK market thereby bringing a new dimension to milk trading and dairy farmer relationships.
• One of the processing companies is planning overseas expansion due to lower milk supplies and as an opportunity to increase turnover. We have plenty of exportable skills and the scenario is presenting an opportunity to move into a developing market with a joint partnership leading to a merger or a takeover.
• Product innovation has been phenomenal on the back of increased profits leading to further R&D investment. We are exporting added value branded dairy products worldwide.
• Another supermarket has been taken over. The authorities are saying no to further amalgamation, but you can’t escape their unyielding power – they own corner shops, garden centres, petrol forecourts, motorway service stations, banks, insurance companies and public transport.
• So here we are, 10 years down the road, farmers have continued to leave the sector, national production never returns to original quota level, and there has been an inevitable shake-out among the dairy companies.
By 2021, I firmly believe a supply chain will have at last evolved whereby all sectors realise they cannot exist in isolation and the constant moaning of unfairness has stopped. Dare I say harmony will reign?
Improved communications will exist with buyers, both up and down the line. We will have no choice but to work with the multiples, and as their customers now want more British food, then they will have no choice but to help us grow our business to guarantee supply.
A cross-section of the entire sector is currently carrying out an exercise to determine the shape of the industry in 2020 and to help prevent it lurching from one issue to the next. Called Dairy 2020, it aims to identify and address the key issues that will secure a thriving and successful future dairy industry, and define what contribution it can make to a sustainable world.
How the industry faces these challenges determines our future.
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