Farmer Focus: Farmers can’t keep absorbing price drops

Last week I travelled by train to Coventry and met up with our English NFU counterparts at Stoneleigh to discuss with Defra the forthcoming consultation paper on the future of milk contracts post Brexit.

I’m pleased to say that we should see the paper after Christmas. At the moment, the only holdups are legal issues regarding some devolved matters, mostly with Scotland.

As I prepared to go to this meeting I looked back over the last 36 months of selling milk to Arla. My average cost of production is 26p/litre.

See also: Compact feeding lifts milk yields by 1.6 litres a cow

The first year it was 21.5p, then 26.05p and last year it was 29.05p. I produced just over 22 million litres sold at average of 25.5p/litre, leaving a deficit of more than £100,000 for 1,095 days’ work.

So, basically, every day created a loss of a £100. I think if our market is to continue to operate in such a fashion, dairy farming will shrink in the next five years, so fellow dairy farmers please think about this paper that will come out earlier next year.

Dairy UK, Arla and Muller have already been scaremongering farmer representatives into thinking that change is a bad thing.

There is zero desire at the retail end of supply chain to help the primary producers – so let’s start at the bottom and work up.

As an Arla member I could easily say “I’m in a co-op, it doesn’t matter”, but I believe we are shareholders of an aggressive processor.

I want them to compete in a fair market, meaning all other processors, large or small, use the same basis with a contract of fairness to their farmers.

The UK has such a huge potential to grow its supply chain, especially after Brexit. 

Back on the farm, and more repairs were needed over the past few weeks. One major fault I found was in the milking parlour, amid rising cell counts and mastitis cases.

I realised water supply had been restricted to the filler tank. Our cell count has dropped by 40,000cells/ml in a week, so that’s surely worth at least £100.

Gary Mitchell is a Farmer Focus writer from south-west Scotland. Read his biography.