The government is reportedly looking into the redirection of milk from the hospitality sector to the retail market as farmers warn of financial trouble following of a severe drop in demand from cafes and restaurants.
Whilst there has been an increased demand of 15-20% for milk in grocery, NFU Cymru said this is not enough to offset the 70% fall in demand from the hospitality sector, with the majority of operators forced to close down indefinitely as the nationwide lock down to slow the spread of Covid-19 continues.
John Davies, president of NFU Cymru, said in a letter to MP that the UK’s supply chains are ‘highly complex’ and ‘vulnerable to disruption’, and are currently trying to orientate themselves away from the foodservice sector and towards the differing needs of retail outlets.
Many dairy farming businesses have highlighted severe financial implications due to the coronavirus situation, as the UK’s largest independent processing dairy, Freshways, announced a significant drop in its milk price after seeing a declining demand due to Covid-19’s impact on the hospitality and food service sectors. Payments to farmers by Freshways will be deferred until 15 May.
Alan Smith, from Bumble Bee Farm in Leicestershire, which supplies milk to Freshways, said: “We’re losing nine pence on every litre [of milk]we send but the worst of it is they won’t now pay us for 70 days. We can’t go on losing forever.”
A Defra spokesperson said the government is aware of the need to redirect produce due to the Covid-19 crisis and is looking at the matter as a ‘matter of urgency’.
“We are working closely with representatives from the dairy supply chain to understand what short-term and long-term support the whole sector needs,” the spokesperson said.