Lotta bottle?

Jane Pikett asks – where to buy a responsibly sourced pinta?

Some 30 years ago, my husband would trudge up our local farm lane on his way home from school through the cow pats left by the black and white dairy herd which trod the same path to the milking sheds.

Today, our own children walk a clear path past attractive homes created from the barns which once housed the milking parlour.

The herd is gone, one of many which have disappeared from this green and pleasant land in recent years; victims of tumbling milk prices which have forced many farmers to sell, slaughter, or diversify.

Why it’s taken so long for this issue to gain such a momentum that people are discussing it in Tesco’s aisles is a mystery, certainly considering that the number of UK dairy producers has dropped from 35,741 in 1995 to 14,793 by the end of last year.

Consumers have been conditioned by some of the largest supermarkets to expect milk so cheap that it is now, in many cases, sold below cost.

The result is noticeably fewer dairy farms. And those farmers who remain in business are under growing pressure to increase their herd size to achieve lower costs. Times are especially tough for the small family farmers who are so much a part of the North East countryside.

The nightmare scenario – which sounds overly dramatic but follows the recent trend – could be the complete disappearance of British milk and a dependence on imports, which means the longlife stuff they put in your tea in France.

While Farmers’ For Action members are barricading processing plants, and the WI has joined a fast-growing campaign for the farmers, the National Farmers’ Union (NFU) is advising consumers to shop at places where they are assured farmers are paid a “sustainable” price that pays for the cost of production

The NFU focus has largely been on some of the big supermarkets, while the British Retail Consortium says the stores are actually the best payers and that big buyers including manufacturers and the public sector need to show more support for farmers.

Both agree that the big processors have a responsibility to pay dairy farmers a fair price, and that doesn’t necessarily mean passing the cost on to the consumer.

Currently, in response to the protests, virtually all the main retailers have pledged to meet farmers’ costs of production, but there is no indication of how long this will last, or how sustainable it is for the industry.

Work is ongoing to agree a voluntary code of practice that will ensure dairy contracts are fairer to farmer producers and meanwhile, the NFU is asking consumers to keep asking all retailers where and how their milk is sourced.

The family farm

Dennis Gibb (pictured above) and his brother Richard have been farming at Eachwick Redhouse near Newcastle for 40 years, on the land farmed by their father and grandfather and before them.

They have 300 milking Holstein Fresians on their dairy/arable farm and the changes they have seen in the last 40 years have been dramatic. “It used to be reasonably profitable,” says Dennis, 61, “but over the last 12 years the margins have become extremely poor and some years we have made nothing at all. Farmers are locked into restrictive contracts with no say over prices and no option to get out of contracts.

“Because the margins are so bad, there has been a terrible lack of investment on dairy farms. The costs of maintenance are very high, as is the cost of feed, which has rocketed. When my father was my age, we had about 80 cows, but my brother and I have been forced to increase numbers, not necessarily because we wanted to, but for economy of scale.”

Dennis, whose working day begins at 3.30am and ends between 7pm and 9pm during harvest, believes the industry can only survive with an end to the restrictive contracts which tie producers into a single processor, often for 12 months at a time, with no say on prices. “We want to stay in dairy, but that depends on things changing.,” he says. “The current situation cannot continue.”

At a glance

Farmers say: They are losing about 5p on every litre of milk they produce because of price reductions, soaring costs and difficulty accessing finance from the banks.

Processors say: They are trying to assist while offering value to the consumer. The large processors – Wiseman, Arla, First Milk and Dairy Crest – had all dropped further price cuts planned for August 1 as we went to print, but the situation is extremely fluid.

Farmers say: The current free market (ie the cost of milk is not regulated as it used to be by the Milk Marketing Board) has broken down, resulting in some processors and some supermarkets abusing their power. Farmers are typically locked into fixed 12-month contracts with processors, and with all the processors cutting prices, there isn’t anywhere else to go. Farmers rarely have the bargaining power to sell milk directly.

Processors say: They are in a competitive market where demand is falling. The price of cream on global markets has fallen dramatically, and the price paid to UK farmers reflects this.

Farmers say: A voluntary code would ensure a ‘fairer balance’ within the supply chain. Alternatively, legislation would result in greater transparency around prices. They say farmers can’t afford to wait for the Grocery Code Adjudicator Bill going through Parliament now to pass into law and create a supermarket watchdog. They want the Government to speed up and enforce a draft code of practice between processors and producers.

Processors say: They are doing all they can in a competitive market where demand is falling.

Farmers say: There will be a ‘substantial contraction’ in the industry if the price stays as it is.

Processors say: This is a complex supply chain issue of farmers seeing higher costs, processors facing volatile commodity markets and supermarkets trying to get value for customers.

If you want to buy milk bought at a ‘fair’ price from the farmer: Seek out your local milkman and opt for doorstep deliveries, buy direct from a producer which processes its own, or ask your retailer for information on what its dairy suppliers are receiving per litre. If it is below 30p, the supplier is probably making a loss.

You could also seek out a retailer which offers aligned contracts: These contracts guarantee to pay at least a farmer’s cost of production and the amount paid rises and falls with changes in costs. Some 2,000 of the UK’s farmers have these contracts which are currently offered by Tesco, M&S, Sainsbury’s and Waitrose.

So how much is a pint?
A surprising number of people don’t know. A highly unscientific poll of 20 consumers carried out by appetite the day before we went to print revealed only one of them knew the price of a pint or a litre of milk. They also didn’t realise that if there were an increase in prices paid to farmers, it would not necessarily lead to a price hike for consumers, as increases may be absorbed into the supply chain.

Lotta bottle
Milk is a food and a drink, bursting with vitamin A and B, calcium, carbohydrates, phosphorous, magnesium, protein, zinc and riboflavin. Whole milk (ie the full-fat one) contains only 4% fat, while semi-skimmed contains 2% fat.

Farmer and processor

The Tweddle farming family’s answer to falling milk prices was to go organic and supply the customer direct.

The family’s Acorn Dairy, which produces organic milk and cream from 170 Dairy Shorthorn milking cows, now supplies stockists regionwide and some 4,000 doorstep deliveries.

The family has been farming near Darlington since 1928 and its four generations of farmers has seen many changes, not least in the fall in milk prices and the corresponding intensification of dairy farming

Indeed, when the family first began the organic process in 1998, they had 300 cows on 330 acres and were considered a large farm. Today, an intensive farm will number some 2,000 cows reared in the cheapest way possible, which means less space and more time indoors. “We are fortunate because we are close to the A1 so we can distribute milk directly to the customer,” says Acorn’s Caroline Tweddle (pictured above with Acorn’s Aberdeen Angus bull, Frazzle).

“Not all farmers can do that, and may have to farm more intensively and sell to the big processing companies. We decided to become our own processor and retailer, which gave us the option to farm less intensively.

“Consumers may not realise that the cheapest milk is not always the best value. Low intensity farming produces more contented, healthier cows and – as research from Newcastle University has proved – better quality milk. But it is more costly to achieve.

“Our approach also includes a commitment to the maintenance of our hedgerows – which is why we have 65 different species of birds on our farms – and to the health of our animals. All the animals have more space, especially in winter. This reduced intensity has led to fewer
health problems.”

Acorn Dairy, Archdeacon Newton, Darlington, DL2 2YB, tel 01325 466 999, www.acorndairy.co.uk

The processor says

Robert Wiseman Dairies is one of the processors which withdrew its planned August 1 milk price cut following blockades by dairy farmers.

When we went to press, this meant that the price paid by Wiseman would remain 26.43p a litre. The company had intended to reduce its standard litre price by 1.7p a litre to 24.73p a litre.

A statement from Wiseman said: “We have been engaging with our customers with regards to the exceptional circumstances facing the supply chain and the need for urgent and significant support.

“From our discussions to date, we are confident this support will now be demonstrated. We have confidence that we can work with our customers and farmers to address the obvious challenges that exist,” the statement said.

The supermarket says

William Morrison Supermarkets, the smallest of the four main UK grocers, is one of the supermarkets which has pledged to improve payments to farmers. The supermarket chain recognised “the exceptional pressure on farmers currently,” Morrison’s Commercial Director Richard Hodgson said in a statement on the company’s website.

An extract from an open letter to The Times from High Fearnley Whittingstall and Jamie Oliver last month:

Dairy farming in this country is fast becoming completely unviable. Why should we care? Because, unlike a lot of other industries, famers can’t go on strike, cows need milking every day. Farming isn’t just a job; it’s a way of life.

The value of milk is something we have all lost sight of. We pay more for bottled water than we do milk. We enjoy a fresh product because farmers care about the quality of their milk and work hard to look after the cows that produce it. And those grazing cows are responsible largely for the beautiful countryside we all enjoy; the patchwork landscape that our country is famous for. Dairy farming is an intrinsic part of our countryside.

Stop letting milk be the loss leader in supermarkets. We can all start by paying farmers a fair price at the farm gate for their milk. A fair price that means they – and we – have a future where dairy farming is great in Britain again.

Cream of the crop recipes click here


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