A tremendous victory for dairy farmers - temporarily

What a difference a week makes! It was forecasted, it was anticipated, and it was delivered; an end to the long winter as the switch was flicked to scorching summer.

It took four days before the cows could go out to graze by day, and it took two more days after that before the silage contractors could move in to make our second cut silage.

It was another big cut, quality is variable, but made in these sunny conditions it should be perfectly fine. The ground is only dry on top, and the grass turf just about supported the machinery, which is rather different to cereal fields which are still proving to be very tricky for harvesting around here; tram-lines are still full of water in some cases, and deep ruts behind the combine harvesters despite very big tyres and even tracked machines in some cases.

A tremendous victory for the dairy farmers, NFU, and everyone who supported us over the last three weeks.

The proposed cuts for the 1st of August which would have made a very bad position absolutely impossible, have been averted.

One by one the retailers put up their price to processors last week, enabling the dairy companies to reverse the 2p per litre cut which is a great relief to all.

The unprecedented support from the media, celebrity chefs and the general public, coupled with the determination of the industry to fight, won the day.

However, this is temporary, as some of the cuts have only been delayed for two months, and Robert Wiseman Dairies, who play hard ball right up to the end, were the last to see that the game was up.

Let’s also be very clear that this stops a cut that had not yet taken place, and farmers’ present position following the spring cuts are unchanged; there is no extra money to cover the cost of rapidly rising feed, the huge costs associated with weather conditions, and an expensive winter ahead.

Many farmers will still decide to give up production, and I can see an escalation in the numbers leaving the industry; why would they stay to work all hours and lose money? That is the rub; free marketeers would say that as farmers leave and the supply drops, the price will go up and then it will be in balance.

We know that not to be the case, every time there is a crisis and the market should react, there is a huge delay due to the power of the retailers, and the contract between farmers and dairy companies; this forces quite a number of farmers out of the industry, weakens many of the other players, and we import more dairy product.

The dairy companies and retailers know full well that the general public would pay a higher price for milk, but they choose to sell at a very low price in order to bring people into the store.

As milk in all major retailers is exactly the same price and the public do not know what that price is; how does that work? The only people who know the retail price of milk every day are the retailers themselves, as they make sure it is exactly the same as their major competitors; it’s absurd.

Milk supplies have dropped severely now, and will continue to drop this summer; we face a winter with poor quality silage in many cases up and down the country, and the maize crop is not great, the very high cost of grain and soya (and other protein crops) which will make any recovery unlikely.

An increase in the milk price is therefore needed urgently, and should be forthcoming; instead, we have been fighting to prevent a further massive cut in our price.

The ‘Cost of Production’ models will reflect these increases in the autumn and will be proof positive that things are serious for those farmers supplying other liquid markets which are the traditional battle grounds between the processors.

The ‘Heads of Agreement’ for a voluntary code of practice has been agreed last week, and we must wait and see how far we can get with that, and what the detail has in it. I still think that legislation is where we will end up, just like the ‘Grocery Adjudicator’ has had to be passed in Parliament, following the major retailers’ failure to honour the voluntary code of practice we had with them over several years.

The really powerful message which came out of this campaign was the support across the board for dairy farmers, with ‘The Grocer’ magazine stating that 19% of consumers (that is 4.3 million people) are looking to change the way they shop as a result. That is a profoundly worrying message for retailers; their attempts to lure shoppers from competition pales into insignificance when compared to this.

Those who look after dairy farmers need to go out there and promote the fact, as it is still widely unknown; we will publish who does not! 67% of the general public know that dairy farmers cannot make ends meet and need to be paid more, 19% say they will change the way they buy milk as a result of the protests, and 11% plan to change retailers.

So just to repeat who the good retailers are Waitrose, Tesco, Sainsbury’s and Marks and Spencer. The others have put more money up, but they have not committed to a long term solution and they are Morrison, Asda, and the Co-op.

The rhetoric is promising, but we have been duped before; not this time.

As dairy farmers we should spare a thought for pig producers who are facing the same predicament; sky high feed costs and reluctance by retailers to increase the price, which at the moment means that on average a pig farmer is losing £20 per pig. This cannot go on for long for obvious reasons, and despite all the rhetoric about the support for high welfare British pigs, production will fall rapidly and imported pig-meat will take its place.

No one wants to see food go up in the shops, but it is inevitable if the costs of producing it go up, and as citizens if we want higher environmental and animal welfare standards; they cannot be achieved free of charge.

The worst case scenario is to drive British farmers out of business and still face higher prices from imported products once that has happened; indeed if British farming is sufficiently weakened, then prices will be higher ultimately as choice diminishes. How does that help anybody?

We can all feel good for the next few weeks as the Olympics take place, and I hope to see a clutch of Gold medals won by our athletes. I hope everyone enjoys the spectacle.

The weather will hopefully be good, so that anyone not watching the Olympics can enjoy that, and we can get on with catching up on our work, with some time to watch our athletes in the evening.

Gwyn Jones