At least now there will be a crop worth harvesting

Some summer sunshine as the Olympics reached its last week. Our postman went to see Usain Bolt running in the 200m and came back to report a Haslemere to stadium journey of one hour 15 minutes, which is impressive.

He did say they had to walk a fair way to a tube station at the end of the evening as everyone left the stadium, but they were accompanied by ‘cheer-leaders’ who informed them of distance and kept them cheerful.

It does sound as if it has been very well organised indeed, and that every effort has been made to look after the important details which lasts in the memory. Well done to the organisers and everybody concerned.

Back at the farm, we have been making the most of the dry weather and injecting our dirty water into the silage aftermaths, with great results as the grass grows vigorously, and within a few days no trace of our activity.

The maize which is between five and six foot tall has cobs on it! It tassled early about a fortnight ago, and there was no sign of a single cob; anywhere. I began to wonder if we were going to get a ‘blind’ crop, and that the weather was to blame?

I didn’t dare go back for over a week, but now there are cobs everywhere, two per plant as one would expect due to the stressful season, but it should fill them out well this year with all the moisture in the soil?

We can only ever tell at harvest, but there will at least be a crop worth harvesting now.

The grazing for the dairy cows is a bit scruffy, due to the weather, the on/off activity, and the fact that it was too wet to mow.

We are grazing them a little more lax than normal, as we don’t want them eating the poor grasses which don’t produce milk, allowing them to munch on the best quality grass of their choice, addressing the remainder with the mower.

It will be right by September, when it will be time to think about yarding them again!

It really has been a trying year, and I hope we will enjoy a nice end of summer/autumn spell of good weather, as we all could do with some sun on our backs, good quality straw for the winter, and a nice crop of maize.

We are off to France on Tuesday morning (yesterday), hopefully to relax and enjoy similar weather to last week on a more permanent basis. We will be back on the 30th of August; the next day will be autumn!

The dairy protest has been watched with interest in Europe and around the world, with a mixture of admiration as to how the ‘coalition’ has managed things so far, anticipation for their next steps, and some concern in Australia and New Zealand about where it leaves the British dairy industry in terms of competitiveness.

Retailers have been shocked by the campaign, those who were not paying a proper price have almost all moved to do so, with one or two exceptions who are being put under pressure; the processors are divided, with some real progress offered by one or two, but the trade association Dairy UK are digging in their heels behind closed doors.

Farmers For Action have called on all retailers to pay a ‘cost of production’ price for their milk, extending it to all products which brought an instant response from Dairy UK that this would put the future of UK dairy at risk and flood the market with cheap imports.

Dairy UK Jim Begg took things a step further by immediately hiding behind competition law, and is said to have forwarded the letter to the competition authorities.

This raises an important question. Why would the call for processors and/or retailers to pay cost of production in their contracts be a competition issue?

Given that buying milk or milk products below the cost of production has no guarantee of a lower price to the consumer, why would the reverse be true?

It is of course all about margins; milk bought for below cost of production on the farm, offers those in the supply chain an opportunity to sell to the public at ‘reasonable’ prices, making a much bigger margin for themselves.

It has been shown time and time again that there is enough money in the dairy supply chain for farmer, processor and retailer to make proper returns, but if retail power and processor mismanagement allows most of the margin to be made by the retailer; there is nothing left for the dairy farmer.

The competitiveness issue is a real one; if we are not competitive in this country, then others will take our markets, we have seen that happen in other sectors of industry.

However, Jim Begg needs to look to his own members, the dairy processors, as the competitive issues run through the whole supply chain, and this is our biggest problem. Until processing of commodity in the dairy industry is competitive, there is no ‘floor’ in the market on which to build.

Processors never threaten major retail customers with switching milk to other use, as they fear becoming dependent on a market in which they are not competitive.

Jim Begg compares the Irish price for milk at the farm gate last week to our own, very convenient; he did not compare it over the long period of almost two years whilst it was higher!

It doesn’t pass me by that the exchange rate between the pound and the euro recently has pushed the Irish price down in that comparison.

The Irish comparison is a good one to ponder. On balance, despite having to export most of what they produce, operating in the commodity market, and not having a fantastic market with tens of millions of consumers on its doorstep as we do, the Irish industry on balance pays its farmers more money for their milk than the UK does.

Not only that, as most of Irish production is based on grass, about seven times more milk produced in the spring as in the winter, where the UK is comparably level with higher costs to achieve that, and severe penalties for failing to achieve.

Yet, Irish cheese undercuts our own in price. How can that be? Efficiency of processing has to be a major factor.

The Australian dairy industry is also highly seasonal, again producing milk mainly from grass, and there are moves afoot to change that to a more level production; it’s what the market wants is what they are being told.

This will push up Australian production costs and they too will face even stiffer competition from their New Zealand neighbours who are renowned throughout the world for their milk from grass and efficient processing.

Australian dairy farmers, who also suffer from a stronger currency, will worry about their costs and competitiveness in a market where they also trade most of their production.

It will be interesting to see where the ‘Dairy Alliance’ takes things in the UK. It looks to me that the next steps will be challenging as the processors dig in; the liquid market has a short chain and is transparent, with major retailers and their brand names to protect as customers, but once they venture into manufacturing milk, it’s a different ball game.

Dairy farmers up and down the country will be hoping that they can do something as winter approaches.

Gwyn Jones