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SEMINAR ROUND UP... MAXIMISING CONTRACTS


maximising the value of their milk under their current contract and if not then take steps to do so when it’s feasible. AHDB Dairy’s Luke Crossman said it could be a matter of changing feeding or breeding strategies to either increase yields or milk constituents if it would lead to better prices. “It really is worth taking time to read your contract and see what you can do to earn more for your milk. It often doesn’t take much to earn a bit extra. However, it is important to make sure that the investment need is worthwhile and not outweighed by any extra costs involved.” Mr Crossman said for some herds it may be a case of tweaking their calving pattern to better suit milk buyers’ needs or perhaps moving to


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armers need to consider whether they are


every other day collection. “The important thing is to speak to your milk buyer and see what will suit them and then assess whether any changes can be incorporated in to your farming system.”


It is equally important to continually assess your buyer and whether they are the right buyer for you in the long- term. “Are they committed to the future and do they have sufficient market share to give you the confidence to stay with them? Also look at the contract


terms when it comes to notice periods and be sure you can work within the terms being offered, he said.


“Looking ahead a milk futures market may be something that needs to be considered, but it would need to be carefully considered. It may not suit everyone and could be an issue for many farmers on a rising market. There would need to be sufficient farmer understanding of how it would operate before anyone committed to it,” he added.


9


PROMAR’S OUTLOOK ON THE DAIRY INDUSTRY


armer numbers is not the most important determinant of a vibrant dairy sector, according to Andrew McLay from Promar.


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Speaking at the event Mr McLay said he was more concerned about the volume of milk being produced and the number of cows being milked rather than the number of farmers. “The world dairy market is a cyclical market, therefore, it will get better and the emerging markets which have driven the trade in the last few years still have plenty of potential left.


“Throughout 2013 and 2014 the worldwide dairy industry was in what could be described as a ‘perfect calm’. There was high demand and near perfect growing conditions in most


of the major milk producing nations. “Unfortunately that led to the current supply and demand in-balance which the industry now has to work through.”


Looking ahead he said the better times would return, provided producers were resilient enough to survive. “European production is ultimately going to increase in the next five years, with a likely expansion of about 15% or 23bn litres. All of this extra milk will need to be exported to new markets and it is important that processors invest heavily in distribution and promotion in these countries to secure the markets.”


And while many UK farmers may feel producers in other EU countries have it better than


them, Mr McLay says the truth is that the UK is not a bad place to produce milk when all factors are considered, including land prices, labour availability and regulation.


But UK farmers should not be afraid to change their systems if it meant they could become more profitable. “Farmers need to become solution focussed and engage with processors and others in the supply chain to succeed.


“What farmers need to do now is ensure they have structured plans for the future of their businesses and focus on the 10 year average milk price rather than the current milk price. Make your plans on that basis and ensure you look at a number of different scenarios for the future,” he added.


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