No silver bullet to address dairy downturn

The Tenant Farmers Association believes that a range of measures, rather than one silver bullet, is needed to tackle the current downturn in the dairy market and unless the whole of the industry pulls together the current difficulties could last for some time.

TFA National Chairman Stephen Wyrill said “We have been told to expect volatility but the ups and downs of the last five years have been nothing short of destructive. The majority of retailers and processors appear to lack any strategy and although they pay lip service to the idea of working with the farming community, it is always the dairy farmer that ends up paying the price when markets soften. If retailers and processors are serious about wanting a joined up supply chain, they must be more willing to share the current pain rather than seek to maintain their margins”.

The TFA is also supporting the Farmers For Action (FFA) campaign to encourage the Government to distribute surplus dairy products to the needy through food banks.

“The current trade restrictions enforced by Russia against certain EU dairy products is contributing to the collapse in dairy prices. Although the EU has signalled support for private storage aid, whatever is put into store will overhang the market and will have to come out at some stage. A distribution scheme which provided the opportunity to offload surplus product now would be much better for the long term. I would therefore encourage everyone to sign the petition that FFA have sponsored on the HM Government e-petition website,” said Mr Wyrill.

The TFA also believes that Dairy Co has a role to play in expanding our export markets.

“The UK dairy industry is reliant upon the domestic market and we have, to date, taken little advantage of growing markets overseas. Expanding exports must be part of the solution; learning lessons from New Zealand, Canada and, closer to home, Ireland. Dairy Co must show that it is putting effort into that promotion,” said Mr Wyrill.

“More immediately as producers we will need to focus on increasing our efficiency and reducing our costs. The Government has a role to play here in not foisting heavy-handed regulation which creates a high cost environment within which production takes place. A key factor at this time of year is rents. We have seen landlords with unrealistic expectations of the extent to which rents could increase and also seen some tendering on new farm business tenancies taking leave of their senses in bidding well over the odds for opportunities that will only end in misery. Let me be clear, there is no scope for dairy rents to increase but if there was a direction of travel it must be downwards,” said Mr Wyrill.

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