SPECIAL REPORT: Dairy In Distress

How much has the farm-gate price for milk dropped?
A quarter in the last year.

Why has this happened?
Many reasons. A global oversupply coupled with less demand. Subsidised by the EU, farmers became super-efficient and produced a milk lake. But a strong pound makes British milk expensive. Plus demand from China reduced as their economy slowed.  Demand from Russia reduced in retaliation for our sanctions.

Are there any other factors?
Yes, animal feed costs increased more than 50% since 2007. EU subsidies for dairy farmers stopped in April 2015. Not all the milk on the market is British and particularly good summers made New Zealand milk products plentiful and cheap.

Who is worst affected?
Smaller dairy farmers (fewer than 200 cows); those in remote areas far from dairy processing plants; tenant farmers; those who needed the EU subsidy to stay in business; farmers who didn’t diversify or get themselves into partnerships. Larger, better situated farmers may be part of a ‘dairy development group’ in partnership with a supermarket. They get a sustainable price for their milk in exchange for promising high welfare standards and are thus cushioned from the vagaries of the milk price. Only 600-700 farmers are in this situation which leaves 4,000-5,000 struggling.

Are the supermarkets the bad guys?
Not necessarily. Many feel: everyone in the food chain has become fixated on price no matter how high the toll; there’s also lack of transparency about who gets what on the journey between farm-gate and supermarket shelf. Some even say that farmers can be stubborn and fiercely individualistic and think it’s not okay for the taxpayer to fund a lifestyle choice that isn’t a viable business.

What you can do as an independent retailer

Ask. Whatever milk products you stock, ask where the milk comes from and whether the farmer gets a sustainable price

If you’re doing the right thing, shout about it. Explain your supply chain and go on a site like mychainreaction.co.uk. Reinforce good feelings about your business. Give your customers the feel-good factor that by buying from you, they’re contributing

Get into food tourism. How about a visit to the dairy with tastings or meet-the-farmer days?

Remember you are a consumer, too. Buy your pint from an ethical source

Read the full report in the October issue of Speciality Food