Opinion: Light at the end of the dairy tunnel

Sound the trumpets, bring out the bunting – we’re past the bottom of the dairy crisis. Or so the analysts say.

Production is finally slowing at home and across Europe, and the markets are responding, with the global dairy trade (GDT) edging upwards over the past few weeks.

But what does that actually mean for us farmers?

If we have at last reached the bottom of this unprecedented landslide in milk price, it’s not exactly a good place to be and hardly feels like cause for celebration.

See also: Opinion: My 10 hopes for the next generation

Yes, Meadow Foods and a few others have issued price increases, but the base was so low they are still a long way from anything like a recovery.

Price cuts

When I first wrote about the turnaround in dairy fortunes back in November last year, I had no idea that the price cuts would continue for as long and as hard as they have.

Admittedly, as an Arla supplier I haven’t felt anything like the pain that those on First Milk and other contracts at the bottom of the price league have felt, but, perhaps naively, I thought the cooperative would be able to protect us better from the worst of the cuts.

Liz Haines and her husband Nick milk 320 spring-calving cows in a contract-farming arrangement in north Shropshire.

I also wrote about Morrisons’ Milk for Farmers, which the supermarket had introduced as part of “a range of measures introduced to help British dairy farmers” (Morrisons-corporate.com).

It seems ironic then, that only a couple of months ago, they were running a special offer on 12 pints of milk for just £2.

Tight budgets

When I questioned them about this on Twitter, they first suggested I must have made a mistake, before conceding that “many of our customers are working to a tight budget and every penny counts so it’s important for us to be competitive on everyday essentials such as milk”.

They don’t need to tell me about working to a tight budget.

While special offers like this don’t affect the farmgate price and are a separate issue from the global situation, they hide the real cost of milk from consumers and do nothing to help our cause.

Despite the recent upsurge of public support for farmers, perhaps not much has really changed after all.

Of course the major change we now have to contend with is Brexit.

Phoning up to buy fertiliser on 25 June and finding out that Polish Nitrogen is now unavailable was an inconvenience, and I was glad to have ordered a full tank full of red diesel the week before.

But a drop in the value of the pound might actually help milk prices, as long as the euro doesn’t fall too far alongside it.

It is all swings and roundabouts.

At the moment uncertainty abounds, so I was relieved to read the statement from Arla’s executive management team: “Arla will focus on… preserving the free trade between the UK and the EU that is so important to the company’s business.”

Important to the tune of more than 25% of its global revenue, which is generated in the UK.

Post-Brexit trade

The message confirms the seemingly obvious – Europe will still want to trade with the UK in a post-Brexit world; in many cases they can’t afford not to.

In the meantime, we continue to milk our cows and in many ways things don’t feel any different.

The most important thing when milk prices do properly recover (which won’t be for a while yet, and certainly not to the giddy heights of 30p/litre) is to remember the lessons we have learned during this downturn, and not let costs creep back up with the milk price.

That way when the next slump comes, we won’t be thrown into the turmoil we have been this time around.