Let’s end the parlour games
Dairy farming is in turmoil after round upon round of price cuts. But while accepting farmers have missed some opportunities, RABDF chairman Tim Brigstocke believes the industry can move forward. Jonathan Long met him
Since the demise of the Milk Marketing Board and the splitting of Milk Marque into three co-ops, the UK milk price has consistently fallen, a trend matched almost unstintingly by herd expansion and yield increases.
However, despite it being 12 years since the MMB was disbanded, the UK milk market is still in a period of transition, claims the Royal Association of British Dairy Farmers’ chairman Tim Brigstocke. “For 60 years we had a regulated market and its effects aren’t going to disappear overnight, particularly with CAP reform casting more dye on the water.”
But with milk prices under increasing pressure and a recent Milk Development Council report stating that any decrease in production would not be met with increased prices, what is the best way forward?
“We need an efficient supply chain from the farmgate to the supermarket door. In the short term, we also need some form of regulation, an independent body with the ability to investigate and influence prices. Something akin to OFWAT – OFMILK maybe?”
But surely adding a layer of regulation to the industry would do little to help things. “It would need to have the ability to challenge processors and supermarkets and enforce any pricing structures needed to ensure sustainable returns for everyone in the supply chain.
“And it would also need to encourage dialogue between all parties; there is too much acrimony in the chain at the moment. We need better communication and co-operation, particularly helping drive forward initiatives involving supermarkets and farmers working together to secure better returns, such as the Waitrose and Marks and Spencer contracts already under way,” says Mr Brigstocke.
An alternative would be for cost- of-production plus-type contracts. At least this way farmers would be able to budget ahead of time, knowing for a good way in advance what price they could expect.
On the subject of farmers, how does Mr Brigstocke justify being chairman of RABDF while not being a practising farmer himself?
“The role of chairman is one which takes some considerable time, something farmers have increasingly little of. Most of the board of RABDF are farmers. My role as chairman is keeping the debate moving and being a public face of RABDF promoting the wellbeing of the industry.”
So where does he believe the dairy industry should aim to increase returns? “Product innovation must play a large part in the future market. New, added-value products can reward farmers for meeting market needs, as can regional and local milk brands.”
But before anyone can think about making real money from milk, there needs to be dramatic rationalisation of the supply chain.
“There are too many players in the market and it is an inefficient chain. And that inefficiency starts at farm level. The average producer needs to move himself up to the level where the top 10% are now. Farmers need to make better use of grass and purchased feed and be better financial managers,” warns Mr Brigstocke.
Huge opportunities in these areas have been missed before, he concedes, particularly when farmers were receiving more than 25p/litre. “That was the time to invest in new parlours and farm infrastructure or expand cow numbers.
Unfortunately, hindsight is a wonderful thing and no one knew at the time which way milk prices would go.”
Challenged on why farmers didn’t take the opportunity when they had it, Mr Brigstocke suggests they simply didn’t foresee the problems currently besieging the industry.
The reality is though that the industry will never see those milk prices again, 18.5-20p/litre is a far more realistic price, he adds.
Next in the inefficiency ranks are the processors, particularly when it comes to milk transport.
“There needs to be more pooling of transport and while this could present traceability issues, it’s nothing which can’t be overcome with modern technology, such as bar coding or radio tracking.
“After that, they need to look at their plant and machinery. There is too much old, clapped-out equipment in factories which is costing too much to run.”
So, with inefficiencies identified in both the production and processing sectors, what does he feel of the retail sector? “There’s no doubt this is the most efficient sector involved in milk and milk-product supply, there is little to no slack in retailers’ systems and that is a good thing. The only problem is ensuring the benefits of these efficiencies are passed back to farm level.”
And what is RABDF doing to help farmers achieve lower costs of production and improved efficiency? “One of our key roles is in knowledge transfer, both through on-farm events, conferences and our major annual activity – The Dairy Event.
“We have to highlight good performers to provide inspiration for others, a good example being the annual Gold Cup and Dairy Student awards. Showing how progressive farmers are improving their businesses and driving production and health issues forward is essential to helping others move forward”.
“As is providing them with access to all the main industry bodies and suppliers in one place.”
The problem of bovine TB continues to be a worry and RABDF, like others, wants to see some progress. “First, government needs to find out what has caused the drop in cases since the change of the tuberculin used in testing.
“No one is currently talking about TB eradication, but we must aim to eradicate this disease. We recognise that badgers are a difficult issue for government to tackle, but there is plenty of evidence to suggest that, without controlling the disease in wildlife, it can never be controlled in cattle.”
Other health issues, such as locomotion and fertility, can be tackled by industry through improved management and breeding strategies, he believes. “Many of the problems found in herds today have come from poor breeding. Too often farmers have concentrated solely on production traits, aiming for higher and higher yields without considering other factors”.
“Sire selection needs to take into account a whole host of other issues, most importantly what processors want from the milk farmers are supplying.
“Admittedly to do this they would benefit from longer-term contracts, allowing them to invest in breeding programmes with confidence,” he suggests.
And while many farmers may be unaware of what RABDF spends its time doing apart from organising the Dairy Event, Mr Brigstocke is adamant the organisation has made its presence felt in recent years.
“We have quantified the true cost of producing a litre of milk, something many have tried, but failed to do in the past. The figures may be scary, but unless farmers recognise the costs involved there is no way the industry can thrive.”
Second, he claims the profile of the Dairy Event itself has risen. “The event is now recognised as one of the leading technical events in the UK and is attracting visitors from other sectors as well as dairy farmers.”
Third, Mr Brigstocke reckons RABDF has been working with other organisations to provide a sustainable future for the industry, helping NFU lobby government and providing technical information as needed.
“As a charity we aren’t allowed to lobby ourselves, but we can help those who can lobby to put forward the most comprehensive arguments possible.”
Speaking of other organisations, what does RABDF make of Farmers For Action? “We’ve always had a robust and healthy dialogue with FFA. In honesty, it hasn’t received the credit it deserves for the work which has been done. FFA has mobilised an industry which has historically just sat and looked at what has been going on around it.
“True it has been antagonistic, but it has managed to create good dialogue with processors, and people further up the supply chain respect it for what it’s done. But the level of enthusiasm it has historically generated can’t be maintained indefinitely,” he adds.
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