There was nothing more than ‘‘tea and sympathy’’ for the Dairy UK lobby group who met Liz Truss MP, the DEFRA secretary, in London last week.
With the UK government policy of continually calling for cuts in spending by the EU, there seems to be little prospect of persuading the UK Minister to press the EU Commission for stronger support of dairy markets through higher intervention prices and/or export subsidies on dairy products.
The DEFRA secretary said that she understands the concerns of British farmers over the current volatility of milk prices but added that it is a global issue. She stated that she remained confident the dairy industry has a bright future, despite the crisis!
Dairy UK vice-chair David Dobbin, chief executive of United Dairy Farmers, said that the current overproduction of milk throughout the EU is a problem not only for the market but, also, for those who might be expected to make the strongest push for additional support for the milk sector.
He noted that the Republic of Ireland, for example, is finding it difficult to argue the case while its farmers are currently producing well above quota and the Irish dairy industry is clearly seen to be gearing up to expand in 2015. Latest figures indicate that United Dairy Farmers has 12% more milk this month than in the same period of 2013. Dale Farm cheese manufacturing has more than doubled since last year.
Major retailers are battling hard with each other for sales. They are using milk as one of their weapons. Their profit margins are down substantially. Processors are being squeezed and operating on wafer-thin margins or making losses. Most milk producers are heading towards a tough winter, with reductions in prices for milk ex-farm. Reductions in the price of concentrate feeds have been slow relative to the raw material prices – winter milk producers need those prices to come down.
In NI, an extra penny per litre on the milk price amounts to over £20m per year. Every penny is important for producers but £20m is more than the annual profits made in the processing of that milk, based on reported figures. For processors based in the Republic of Ireland and buying only a small proportion of their milk in NI, the drain on their profits is offset by profits made from milk bought at lower prices in the Republic of Ireland. But the current premium pricing due to competition for milk in NI is not sustainable for the northern-based processors.
Call for more promotion of milk in Britain
Last week’s other meeting of dairy industry representatives with the Dairy All-Party Parliamentary Group of MPs at Westminster was an opportunity for politicians to be seen to be listening – but no one should expect speedy results. The leader of Farmers For Action (FFA) David Handley has reported that the Westminster meeting agreed four principles:
The groceries code adjudicator should be given more teeth to deal with pressure on processors by retailers.More of the levy money collected by Agriculture and Horticulture Development Board should go on promoting dairy products and not telling farmers how to farm.Dairy UK is to seek a meeting with the health minister with a view to putting an end to unscientific publicity on the health effects of consuming milk-based products.Pressure should be put on ministers responsible for public sector procurement to source more UK product.Action on these fronts would be commendable. But the hard facts are that milk prices will have to be down for a lengthy period before the political pressure is built up to a point of providing much additional support – unless some other factor pushes the powers that be into action.
There was nothing more than ‘‘tea and sympathy’’ for the Dairy UK lobby group who met Liz Truss MP, the DEFRA secretary, in London last week.
With the UK government policy of continually calling for cuts in spending by the EU, there seems to be little prospect of persuading the UK Minister to press the EU Commission for stronger support of dairy markets through higher intervention prices and/or export subsidies on dairy products.
The DEFRA secretary said that she understands the concerns of British farmers over the current volatility of milk prices but added that it is a global issue. She stated that she remained confident the dairy industry has a bright future, despite the crisis!
Dairy UK vice-chair David Dobbin, chief executive of United Dairy Farmers, said that the current overproduction of milk throughout the EU is a problem not only for the market but, also, for those who might be expected to make the strongest push for additional support for the milk sector.
He noted that the Republic of Ireland, for example, is finding it difficult to argue the case while its farmers are currently producing well above quota and the Irish dairy industry is clearly seen to be gearing up to expand in 2015. Latest figures indicate that United Dairy Farmers has 12% more milk this month than in the same period of 2013. Dale Farm cheese manufacturing has more than doubled since last year.
Major retailers are battling hard with each other for sales. They are using milk as one of their weapons. Their profit margins are down substantially. Processors are being squeezed and operating on wafer-thin margins or making losses. Most milk producers are heading towards a tough winter, with reductions in prices for milk ex-farm. Reductions in the price of concentrate feeds have been slow relative to the raw material prices – winter milk producers need those prices to come down.
In NI, an extra penny per litre on the milk price amounts to over £20m per year. Every penny is important for producers but £20m is more than the annual profits made in the processing of that milk, based on reported figures. For processors based in the Republic of Ireland and buying only a small proportion of their milk in NI, the drain on their profits is offset by profits made from milk bought at lower prices in the Republic of Ireland. But the current premium pricing due to competition for milk in NI is not sustainable for the northern-based processors.
Call for more promotion of milk in Britain
Last week’s other meeting of dairy industry representatives with the Dairy All-Party Parliamentary Group of MPs at Westminster was an opportunity for politicians to be seen to be listening – but no one should expect speedy results. The leader of Farmers For Action (FFA) David Handley has reported that the Westminster meeting agreed four principles:
The groceries code adjudicator should be given more teeth to deal with pressure on processors by retailers.More of the levy money collected by Agriculture and Horticulture Development Board should go on promoting dairy products and not telling farmers how to farm.Dairy UK is to seek a meeting with the health minister with a view to putting an end to unscientific publicity on the health effects of consuming milk-based products.Pressure should be put on ministers responsible for public sector procurement to source more UK product.Action on these fronts would be commendable. But the hard facts are that milk prices will have to be down for a lengthy period before the political pressure is built up to a point of providing much additional support – unless some other factor pushes the powers that be into action.
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