36 IN THE HOT SEAT WITH
The downturn in milk prices has been felt across the industry, but just what’s behind it and what is the NFU doing to steer things in the right direction. The Journal spoke to NFU dairy board chairman Rob Harrison
Q A
How do you feel the dairy industry is coping at the moment?
Everyone in the sector is feeling the impact of the global downturn in milk prices and trying to keep things together for when we see the market turn. A series of upwards moves in the GDT auction on the back of lower production forecasts from New Zealand brought some positivity but more recently we've seen these turn negative again. Sentiment it is as volatile as the market. There are some farmers that are continuing to fare well, being on cost of production contracts with certain retailers or food service providers, or those with low costs of production. These though remain in the minority. This winter will be tough for dairy farmers right across the country, we need the whole supply chain and allied industries to work together to support this vital sector into the future.
Q A
What work is the NFU doing to help the current milk price crisis?
The NFU can’t buck the global trend in the milk market, but we can paint an honest picture
of what’s going on and look at ways that here in the UK we can support farmers through this difficult period. We’re doing this in a number of ways – in terms of the market we’re encouraging end users to be more responsible in their sourcing of dairy products both in provenance and pricing. We’ve seen a number of large retailers move on liquid milk and on cheese over recent months and we’re also working with the food service and food manufacturing sectors. We’ve lobbied in Brussels and in London for short-term support to help dairy farmers – we asked that the superlevy fund was returned to the dairy sector and that market management measures such as intervention and private storage aid were fit for purpose.
Dairy farmers will receive a one off payment of on average £1800 from Europe to help pay some bills. It’s not much, but it’s better than nothing. We’ve urged Government to ensure SPS and agri-environment payments are made as quickly as possible and continue to raise this with them, and we’ve asked the Farming Minister to speak to the HMRC to ensure measures are put in place to allow farmers to pay January’s tax bills in instalments. We’re also speaking direct to the agricultural lenders and others in the supply chain to explain the difficulties facing dairy farmers at the moment.
Q A
ROB HARRISON NFU milk
board chairman
What has been achieved so far to make improvements in the dairy industry?
It’s unfortunate that it takes a dairy crisis for improvements to be put in place at retail and elsewhere, but this summer we’ve seen a number of retailers put in place minimum pricing on liquid milk, with that money going directly back to farmers. We’ve also seen similar mechanisms being put in place for cheese, albeit for the short-term. Following intense lobbying, we’ve also seen increased sourcing of British dairy products, better labelling and increased use of the Red Tractor label on dairy products. That’s only here in the UK. In a difficult export market we’ve also seen more and more UK dairy products being exported - into Europe and also further afield. Prior to the recent market downturn, we saw the introduction of some formulaic milk contracts – these have offered farmers some stability in milk prices over recent months. We’ve also seen more collaboration at farmer level – in June Dairy Crest Direct were officially recognised as a dairy Producer Organisation meaning that they can now legally negotiate milk prices and contract terms with their milk buyer.
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