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From the editor: High milk volumes, civil unrest and weak PMs - nothing changes

The last time GB milk production was as high as it currently is, in the early 1990s, the poll tax riots were erupting, Margaret Thatcher was exiting Number 10 Downing Street, and the Gulf War was raging.


Ben   Briggs

Ben   Briggs

The fact the current highs also coincide with a time of civil unease and a Prime Minister teetering on the brink are obviously coincidental, but for such a strong flush of milk to occur at a time of wider political and economic uncertainty does pose questions for the state of farmgate returns in the short to medium term.

 

If the UK crashes out of the EU without a Brexit deal and export tariffs to the EU soar, then it might put greater downward pressure on markets already struggling with too much milk and the squeeze could begin for producer prices.

 

The supply and demand dynamics of the milk market have always been complex, even in quieter times, and NFU Scotland’s (NFUS) call this week for farmers and processors to strike up effective lines of communication when it came to what milk was required will no doubt cause producers to smirk, especially as some processors have actively avoided telling their suppliers what to produce in years gone by.

 

But NFUS is right, open lines of communication are going to be vital if the bottom is not to drop out of the market. While no farmer in any sector can be blamed for capitalising on good prices, longer term supply management and cross-sector strategies will be vital.


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Oddly, therefore, Michael Gove’s suggestion this week that there will be no payment for soil health post-Brexit will do nothing to encourage farmers to step away from the production mentality. With no clarity emerging for any farmer in the UK about what the future holds in terms of financial support, there is every chance they could disengage and start upping livestock numbers and cereal hectares.

 

As the dairy sector shows, unless there is clarity on where other income will come from then it will be production numbers, not nature, which will be forefront of farmers’ minds. Maybe that might focus Mr Gove and his UK counterparts.

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