The price of milk – does everyone win but the farmer?
TV, radio and social media have been alive with the sound of dairy farmers battling to earn a fair milk price. The National Farmers Union’s Tom Hind puts forward their case and explains how the fight for milk affects you.
The current #sosdairy campaign has put dairy farming right in the public spotlight, with dairy farmers and their supporters demonstrating outside supermarkets, processing factories and dairy distribution depots over the price of milk.
It’s taken hold of the Twittersphere and drawn public condemnation at the practices of supermarkets and dairies to the detriment of dairy farmers. And ultimately, consumers are at the heart of everything the dairy industry does.
Have you got milk?
The response from the general public to the recent milk price crisis has been phenomenal with many hundreds of people joining farmers at protests or writing to supermarkets and dairies asking what they are doing to look after dairy farmers. And celebrities including Hugh Fearnley-Whittingstall and Jamie Oliver have thrown their weight behind the campaign too.
Milk is iconic. Almost all of us buy at least a pint of milk once a week. Because of that, it’s also highly competitive, with supermarkets waging war on milk prices to ensure we perceive them as offering a better deal than their rivals. The contracts to supply supermarkets are vast and the main dairy companies compete aggressively to maintain and gain milk volume in order to grow their businesses and make a profit.
No-one can afford to take milk for granted. It’s a fresh product that can’t readily be imported. It has to be produced all the year round and to strict hygiene and animal welfare standards. The sums that need to be invested to ensure a dairy farm can maintain high standards and be efficient are significant.
What’s more, cows need to be fed a healthy, and sometimes specialised, diet and most dairy farmers are facing the effects of rising feed costs because of droughts in major grain producing parts of the world. So the price cuts that some dairies recently announced are seen by many farmers as the proverbial straw to break the camel’s back.
Supermarkets promise to pay more for milk
Some supermarkets have been doing the right thing by agreeing to pay prices that reflect production costs to the dairy farmers who supply them. Marks & Spencer, Waitrose, Tesco and Sainsbury’s all have these arrangements in place for liquid milk. In recent days, the Co-operative, Morrisons and Asda have made similar commitments.
But there’s more to do to get a fair pricing model for cheese, yoghurt and other dairy products.
The problems don’t just lie at the door of supermarkets either. Another major problem is the way that dairies buy milk from farmers. For dairy, every farmer has a contract to supply milk. Nearly all of those require farmers to sell exclusively to that processor for a minimum of 12 months. Yet the dairy processor retains absolute discretion and power in setting that milk price, and they can change these prices at will and with no notice. Does that sound fair to you?
That’s why the government’s been helping to broker agreement on a code of practice for dairy contracts to eliminate bad practises and promote good ones. At the NFU, we think this is a step in the right direction to help create a long-term framework for dairy farmers, but it doesn’t help the short-term payment problem.
The future for British dairy farmers is still bright. Now they, together with dairy companies and retailers, all have to work together. We can have more high-quality produce, more diverse and affordable milk and dairy products that excite you, the consumer.
This is the long-term strategy that we think will help ensure our dairy industry is a bit less dependent and vulnerable in such a competitive and volatile market place. And it will help to really deliver what consumers want; great British milk.
Do you think farmers should have more control over the price for milk so that they can get a fairer price? And do you think it’s right that a bottle of water is more expensive than milk?
Which? Conversation provides guest spots to external contributors. This is from Tom Hind, Director of Corporate Affairs at the National Farmers Union – all opinions expressed here are their own, not necessarily those of Which?
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