Tuesday 15 September 2015

Milk protests have been stimulated

Although some supermarkets are now guaranteeing to pay a minimum price for liquid milk, they have given no such assurance for the price paid for other dairy products made from milk such as butter, yoghurt or cheese. These products account for around half the milk produced in this country -- so providing guarantees on the price paid for liquid milk is only half the story.

This has stimulated milk protests across the country and farmers have blockaded the massive Morrisons depot near Bridgwater. Farmers for Action (FFA) decided to shut down the depot for a second time in a week because Morrisons turned down their request to bring forward talks on the price it pays dairy farmers for milk used to make cheese.

But it is not as simple as that. I am no expert on the milk supply chain but I do know there are many different brands of cheese and other dairy products supplied to supermarkets, and I don’t see how Morrisons or any other supermarket can control the price that all these cheesemakers pay for their milk.

Supermarkets could of course pay cheese makers more for their cheese on the basis that the makers then pay their farmers more for the milk. The price paid for cheese is obviously the fundamental point but even then it becomes increasingly complicated in that unless the cheese producer supplies all their cheese to just one retailer, it will be difficult to ensure the higher price filters back to the farmer in full.

The plight of cheesemakers themselves was also brought in to focus by the news that Cricketer Farm near Bridgwater has announced it will halt production in early 2016 after more than 60 years.

Around 20 farmers used to supply this cheesemaker with milk and they will now be hunting for a new milk buyer which will not be easy in an oversupplied market.

Cricketer Farm blamed their plight on the turmoil created by global milk oversupply and the damaging effect of the strong pound on exports. They said: “Market volatility has forced the UK dairy market into a period of uncertainty and consolidation, which is reshaping the industry to be dominated by international dairy powerhouses, focused on global strategies.”


So the pain pervades the entire dairy supply chain and it is not just dairy farmers themselves who are facing difficult times.

Unless some form of price guarantee can be introduced, the whole dairy supply chain from farmers, through processors will look very different in a year’s time and I hope the supermarkets and government realise the consequences of this sooner rather than later.


James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells

T: 01749 683381
E: james.stephen@carterjonas.co.uk

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