Have we ever seen anything like this? Wimbledon and the British Grand Prix were sure to attract rain, but it is never ending; our cows are back in, we have second cut silage to make, but there is no chance at Plaistow, as we could not travel on the clay. We have been farming at Crouchlands for 33 years this week, and I have never seen anything like this in that time. It seems that the jet stream is to blame, and presumably (I don’t actually know what moves it) we can thank our lucky stars that it moves further north normally, but this year it seems reluctant to do so, bringing wave after wave of low pressure systems across the Atlantic, which is now rather tiresome! The jet stream is thought to be responsible for the terrible drought in the Mid-west in the USA, during the 1930s, turning vast swathes of land into a dust bowl, with devastating consequences.
So, the worst year in 33 years, that is a speck in historical (and meteorological) terms, but hopefully statistically significant, in that this (just like the drought of 1976 and the winter of 1962/63) is a rare event; I sincerely hope so! Adrian our herd manager also celebrates 30 years this week since he arrived as a ‘pre-college student’ in 1982, to help me establish a milking herd at Crouchlands Farm. He came back during his ‘sandwich year’, then he returned after college for a few years as a herdsman; left to develop his career, and then came back, quite a few years ago now, to manage the herd.
As every dairy farmer in the country struggles with the weather, I have spoken to some who have yet to make first cut silage (!), the horror stories of flooded land, failed maize crops, cows housed most of the spring and summer, very poor quality silage, increased mastitis levels, astronomic cost of feed, and straw (if you can get any); it is little wonder that dairy farmers up and down the country have reacted very badly to the devastating milk price cuts announced by the dairy companies last week.
The dairy market does not work; it really is a farce. The liquid milk market, which produces the milk you buy and drink every day, is a very simple one. British people demand British milk to drink, and we as dairy farmers produce that milk to the highest standards across the globe; a few do it equally well, but no one does it better, you can be sure as a consumer that you are buying a wonderful fresh product which has a long shelf life (looked after properly), and is a healthy, nutritious and highly versatile food. You can also be sure that it is produced by farmers registered as Red Tractor producers (you will see the logo on almost all fresh milk), which is a voluntary scheme introduced by the industry in order to assure customers that our animal welfare and environmental credentials are sound (in addition to the vast array of red-tape and beurocracy we are subjected to by Westminster and Brussels).
However, our milk buyers, who are not under any pressure from imports, because you want to drink British milk and the cost of bringing milk in from Europe across the Channel would not be competitive, manage to completely destroy any chance of a proper supply chain and a proper market, by competing with each other, in order to grow market share, to such an extent, that they are completely skint, and therefore take money from the dairy farmer in order to make a margin. When challenged in private last week, some of the CEOs admit that they have not made a bean on millions of pounds turned over, because they offered contracts at prices which were little better than break even last year when the cream prices were at an all-time high. The cream price has since dropped and they are in serious trouble, and have taken 2p per litre a month ago, and are again taking 2p next month.
4p per litre to the average farmer in this country is around £50,000, and I can tell you that the average dairy farmer does not make £50,000 in the first place, never mind this year when he is absolutely up against it.
Let me tell you about cream. Retailers sell full fat milk at usually 3.5% fat (a very low fat food in fact), but we produce milk at around 4% fat, and the milk buyer separates that surplus cream and sells it; a bonus you would think? No, I’m afraid not. For as long as I remember, whilst you pay the same for full fat (3.5%) low fat (2%) and skimmed milk at 1%, the processor sells the cream and uses that money to buy more business by giving some of that money to the retailer too! Crazy? Well it would be suicidal except for one thing; the processor knows that the farmer’s price can be changed at any time, and that the farmer not only has to supply 100% of his milk every day, but the notice period is at least 12 months. So the silly old farmer has nowhere to go, and no one is going to change such a brilliantly one sided contract. The farmer has no choice but to carry on or give up milk production which many have and many more will after this.
Clive Black, writing in the ‘Financial Times’ back in April summed it up very well. ‘The business underscores the sheer folly of an industry that showed cataclysmic indiscipline over the past two years in a dash to gain and maintain share, a dash that delivered a collapsed liquid milk market for all concerned’.
The milkmen have suffered six increases in prices according to one who spoke on ‘Farming Today’ last week. They have no choice either; they are tied into one processor and are abused as the doorstep delivery is killed off by such high prices, only to fund the sort of activities described by Clive Black. I sat on Dairy UK’s Main Board for a few years, and apart from a very few exceptions, the calibre of the Chief Executives running our dairy companies, in my opinion, having seen them in action over a number of years, is woefully low.
The deputy fresh food editor in the ‘Grocer’ magazine highlighted where the money has gone; pointing out the difference between retailers paying farmers the cost of production for milk; Sainsbury’s, Tesco, Waitrose and Marks and Spencer, compared to those who are not; Asda, Morrison’s and the Co-op. Farmers and their families are now being urged to change their shopping habits, boycotting those who are not acting responsibly.
Of course there are all the other smaller retailers, and they too will come under severe pressure; we will accept nothing less than the reversal of this latest cut, and ‘Farmers for Action’ will be targeting companies with immediate effect. It is a shame when it comes to this, but what else can we do, when we are systematically abused by poorly run businesses, which hold on to antiquated contracts which belong to a previous era? Jim Paice needs to legislate; we have seen what happens in the banking world when lack of regulation leads to gross behaviour. Well, I’m afraid it’s the same in the dairy industry, and the EU has just passed legislation which enables him to do just that. Will he have the backbone? There will be a mass meeting of farmers with Minister Jim Paice in London today. I will report on it next week.