Successive UK Governments (both Conservative and Labour) have failed to take any meaningful action to help our dairy farmers. Why? Well the cynic or the realist (in me) suspects that this is either down to a combination of nice financial inducements from large Supermarkets and / or a general indifference to the agricultural sector. We, as consumers also have to take a share of the blame because we allowed all of these things to happen, if we want quality milk and dairy products (that are produce from UK milk) then we will have to change the way we buy, if we do that then out farmers will get a better deal.
It's worth noting that the number of dairy farmers in Wales dropped by a third in five years (up to December 2009) and this despite repeated warnings that more needed to be done to save the industry along with the fact that our farmers are also not getting a fair price for the milk they produce, when compared to the price charged by retailers to consumers, will sadly not come as much of a surprise to most people.
There was even prior to the last Westminster General election some talk of a milk ombudsman, but it needs to be more than talk, there is a need for action, before our dairy farmers (and our farmers) are driven out of business entirely. What may follow if nothing is done may not be pretty, it may be semi industrial and serviced by cheap migrant Labour. Supermarkets as well as their bought tame politicos in the Westminster village (is that too harsh? No probably not) have to take a share of the blame for aggressively pursuing ever greater shares of the profit.
When considering the price of a pint of milk there are a few things we should all know. One litre carton of full-fat, non-organic milk can cost between 70-80p (January 2010 figures). From this a farmer will get between 21p and 28p. Production costs come in at around 28p. In the last 10 years two thirds of dairy farmers in England and Wales have gone out of business, and it has been estimated that one dairy farmer leaves the industry every day. While these may be old figures, the situation has not got any easier for the farmers or the consumers, they more than illustrate the problem facing our farmers, especially as we now have to factor in increased transport costs.
The shelf price for four pints has remained static at £1.25 for 4 pints since February 2011, and widespread promotions continue to be offered on liquid milk in May with Sainsburys and Asda offering 2 x 4 pints for £2.00 and Tesco offering 3 x 4 pints for £3.00. Supermarkets are also widely offering branded and organic milk on promotion in May.
DEFRA's annual data shows that the UK farm gate price has increased by 0.95 pence per litre (4.0%) to 24.66 pence per litre in 2010. In UK, there was a 0.22 pence per litre (0.9%) increase from the 2009 average, to 24.60 pence per litre in 2010. The average NI price stood at 19.48 pence per litre in 2009, but there was a 5.56 pence per litre (28.5%) increase in the average price in 2010, resulting in a 2010 price of 25.04 pence per litre.
The old answer to low milk prices or a surplus was to turn excess milk into other dairy products, with dairies producing other valuable products like butter, cream, cheese and yoghurt's. How many local Welsh dairies serving our urban centres that are still in business can you name? Milk aside, diary products can be big business. A 25 pence litre of milk can end up as something that sells for 15 times as much, people pay good money for ‘health yogurt’ – which with the addition of bacteria, flavouring and a marketing campaign produce healthy profits for the companies that produce them.
It is worth noting that some 40 per cent of our yogurt is made in France and Belgium, in 2009 more than 40 per cent of all Cheddar sold in the UK was actually produced outside of the UK. Its not just yogurt and cheese; it's a similar story with butter. Only one of the most popular supermarket brands [Country Life] is actually from UK milk. The bulk of our butter comes from Denmark and Ireland, and this is despite the fact that farm gate prices for milk remain consistently higher in Europe than here in the UK.
We (in the UK) when compared with 11 years ago now import nearly half our butter from abroad, cheese imports are also up, some 60 percent over the last ten years. In the UK we are importing those products that have added-value and are busy exporting the low-value milk products which are then turned into butter, yogurt, etc and sold back to us. This is madness; this is what happens in the Third World, where countries export their raw commodities cheaply and then have little choice but to buy back the manufactured products that are made from their own raw materials.
The NFU has suggested, and they should know, that the UK is in the process of losing a critical mass of milk suppliers and that we are no longer in a position where we supply the UK's “core milk requirement” which is around some 13 billion litres per year (2010 figures). In 2009 / 2010 year there was a 15 percent drop in UK Milk prices. In the last 10 years (up to 2010) the Supermarkets’ margins that is the the amount of the price they take on milk have doubled.
Now with a trend for both the processor and retailer to be the same, we have a situation where they take over three quarters of the price of a pint. We have now reached the situation where in a land renowned for Dairy farming and where even though the price of our milk is cheap, we are now become a net importer of milk.
Ironically it was a development of railway communications during the industrial revolution that provided the means to speedily deliver the farmers milk to our towns and cities and ironically as a knock on effect there was a spread of diary production. It is doubly ironic that the first supermarkets (ironically in Sainsbury’s in Covent Garden, London, in 1869) sold what was then called “railway milk” from churns. The milkman arrived next delivering direct to our doorsteps, his near demise followed some years later was a direct result of super market price-cutting which has now, more or less, effectively killed him off.
The UK Government as early as 1914 recognised that milk was important for nutrition in children, that it helped prevent rickets, and provided vitamins. And so the first government attempts to regulate milk's supply and quality came about. Pasteurization was duly brought in to kill of certain bacteria. We now have low fat milk, slimmed milk, semi skimmed milk, etc – one thing to think about is that full fat milk is only 4 percent fat, low fat milk being 2 percent (or less) and that milk is approximately 95 percent water anyway.
During the good times, pre Mrs Thatcher, the banks fell over themselves throwing credit at framers to encourage them to (as the Government and the EU wanted) to ever expand their production. Once Mrs T (and the Conservatives) who was never interested in farming anyway, being far to enamoured of dodgy money men in the City, allowed Milk quota's (effective cuts) the bad times had begun for our Dairy farmers and oddly enough the banks stopped calling with offers of cheap credit.
What can best be described as industrial milk production is not without its problems – slurry production being one of them, which can be enormously toxic and environmentally damaging. Something else to consider is that modern cows to produce large amounts of cheap milk, a While a modern Frisian may produce as much 4 times as much milk as equivalent cows did 50 years it only has three milking years in which to do it.
We, as consumers also have to take a share of the blame because we allowed all of these things to happen, if we want quality milk and dairy products (that are produce from UK milk) then we will have to change the way we buy, if we do that then out farmers will get a better deal. I won't be holding my breath for the Con Dem Government to get its act together and finally wake up and pull the fat (or the milk) out of the fire...they won't. So what are we going to do?
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