Farm Business Dairy Forum unites industry experts to find the way ahead

Today’s Farm Business Dairy Forum drew over 70 farm and trade delegates to the House of Lords in London to discuss current industry issues.

Topics for discussion included the current low milk price, and whether stronger producer organisations in the UK would enable dairy farmers to achieve better prices from the market.

There was broad support for the concept of producer organisations, while some warned that there is not a single template for success. The ability to make a difference depends largely on the quality of management and the drive, ambition and discipline of the farmer members, in both good times as well as bad.

There needs to be trust and integrity between the producer organisation and the buyer – attributes that are not easily included in a contract.

While the history of UK milk co-operatives since the break-up of the Milk Marketing Board has not always been a happy one, delegates were encouraged to see UK producer organisations as relatively small in European terms, rather than as large UK ones.

Nor should it be assumed that all EU co-operatives are achieving better prices for their members. The situation in the Baltic member states is particularly fraught after Russia’s ban on EU dairy product imports.

The UK has historically been slow to adopt co-operation, but in the new post quota era, it could be time to revisit the concept of producer organisations – there are successful examples in Spain, Southern Germany and France.

At the end of the day, market demand drives prices – while the short term price position will improve, producers should seek local advantage where they can. Certainly, the UK needs more processing capacity and exports, backed by a sustained effort to shout out the message that that milk is healthy, sustainable and good for you. But this can only be achieved by a profitable dairy production sector.

Large herds

The discussion turned to the difficulty in obtaining permissions for new, largescale herds, with pressure groups encouraging widespread opposition.

It was agreed that there is no correlation between increasing herd size and a reduction in animal welfare – in fact the opposite is usually true. Poor welfare is more likely to be found on those units struggling to make any money, where managers are under stress.

Too many retailers promote milk as pastoral, product with ‘chocolate box’ country imagery, while screwing down the price. This is forcing family businesses out of existence. With more rural residents separated from farming, there is understandable suspicion over large units. While much of this is uninformed, farmers need to promote their expansion plans in an open and reasonable way.

Social media and the appetite for TV programmes such as Countryfile could help here. Farm animal welfare in the UK is much higher than the global average – make the most of this!

Continued restrictions will lead to the ‘export’ of young people and capital to
countries where there is more encouragement.

Bovine TB

The third topic was the pilot badger cull to control bovine TB, and a potential Labour government’s pledge to abandon the policy.

Delegates were unanimous that the pilot culls had been effective and the policy should be extended to other hotspot regions. It was unfortunate that the industry was being portrayed as keen to kill badgers, when the aim was to rid both cattle and wildlife populations of the disease, and to end the human misery caused on farms affected by the disease and its control measures. Also, the government needs to ensure the disease is not spread by alpacas and other less controlled animals.

R&D uptake

Delegates discussed whether the industry is innovative enough in adopting new technologies to improve productivity.

The point was forcefully made by many delegates that only a consistently profitable industry provides the platform and confidence to invest. It is clear that investment in digital and precision farming, such as recording and robotics, provides the data to enable benchmarking and productivity growth. It also allows better management and stockmanship by removing drudgery.

However, UK farmers can be slow to adopt new technologies – a report for the Oxford Conference showed that UK farm competitiveness is just average in global terms.

There is a role for government and the AHDB to encourage the adoption of new techniques, but politicians themselves must be clearer in their support, even when public opinion is sceptical.

Dairy exports

The Forum examined how UK dairy exports could be increased. World demand for dairy products is increasing at 2% per annum, so there are opportunities, even though the UK is not self sufficient in butter and cheese.

Initiatives such as the AHDB funded post in China would help, but the EU and UK authorities should provide concrete help to exporters in the face of the political Russian import ban.

Young entrants

Finally, attention turned to opportunities for young dairy farmers. Colleges are reporting rising numbers of students after a couple of decades of decline.
Delegates advised that traditional apprenticeships were key to learning the trade, but should be rewarded with more chances for share farming and management agreements.

Short farm business tenancies were a huge problem for aspiring dairy farmers – three to ten years is not enough to establish a viable dairy business.

Government could act to start new entrant schemes, as have been piloted in Wales – EU rural development money could be used here.

The forum concluded that the future for dairying is bright despite the short term difficulties. The arrival of new blood as quotas end is positive – a confident, vibrant dairy industry will attract more interest, and perhaps let more existing dairy farmers retire with dignity.

The forum was chaired by Sean Rickard, and sponsored by New Holland, with support from ForFarmers; Volac; Barclays Bank; Vetoquinol; Zoetis; Merial Animal Health and Ceva Animal Health.

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