The papers are full of stories about the dairy crisis and how there is no silver lining in store for UK dairy farmers. The situation is set to continue and possibly get worse as milk quotas end this year and even more cheap milk floods the market.
Dairy farmers are now facing a lose/lose situation where they are being encouraged to chase volume to try and recoup some money back for their business, but by doing this risk depressing the price of milk even further. Milk has been devalued to the point that it is worth less than bottled water. That can’t be right.
Where did it go wrong?
Firstly we need to look at the lessons we can learn from other countries that are chasing volume over value. The Pew Charity Trust in America did a report in 2008 which in a large part has predicted the outcomes of intensive methods on the current dairy situation.
“As technological advances were made in animal agriculture, farmers were eager to adopt them as they seemed likely to increase efficiency and maximize profits. However, the technology was usually capital-intensive, meaning that those who adopted the technology had to utilize it at full capacity to achieve profits. In the past, when the demand for a commodity fell, farmers could simply produce less to maintain the correct balance of supply and demand. Since large, technologically invested farms must produce at maximum capacity to make a profit, they maintain or even increase production in the face of falling demand. This often forces smaller producers, who would normally lower their production to remain solvent, out of business.”
This trend towards intensification not just in the UK but across Europe is based on a business model that has to produce milk outputs to maximum capacity to make the investment in the technology make business sense. Many dairy farmers were told to grow their output as a way to grow their profits as their milk will be bought by the rising population and emerging middle classes in other countries. That hasn’t happened, so dairy farmers who have invested in intensive systems need to keep chasing more and more volume to make up the price shortfall. Leaving dairy farmers to compete against each other not on a level playing field but until it is last man standing. What will our dairy industry and our countryside look like when the dust settles?
Is there another way?
In a nutshell yes there is another way – it’s about creating value in the way we farm and that’s what our Free Range Dairy Pasture Promise is all about. People in the UK don’t want to think that every cheap pint of milk they buy is another nail in the coffin for the UK dairy industry. Free Range Dairy Network wants to add value to milk as we think it’s a pretty amazing food source.
Consumers agree with us when we say we want to promote milk that pays farmers a fair price, guarantees that cows graze for a minimum of six months (day and night) per year and it is a healthy product. We are working to encapsulated these values under the Free Range Dairy Pasture Promise label.
Want to find out more?
If you want to support UK dairy farmers and give cows freedom to graze then click here to become a supporter of the Free Range Dairy Network.