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Ian Potter: 'Let’s not squabble over shrinking cake’

This month, Ian Potter tells us how contract legislation might lead to lower farmgate milk prices, how plant-based milks are nudging dairy off the shelves, and finally how we all need to learn to work together.

Milk production in the UK is heading for a 32-year record, and Southern Ireland production also continues to race onwards and upwards.

 

It was up 4.4% in 2018 to 7.6 billion litres, which effectively means it achieved the sought-after 50% increase in volume target two years earlier than was originally set in 2010.

 

More cows, larger herds and more milk per cow have all been the drivers. Ireland has certainly capitalised on the removal of quotas, which for some time had fossilised its dairy industry.

 

However, in its first quarterly dairy report of 2019, Rabobank confirms global milk production is in decline, in complete contrast to the UK and Ireland, and is likely to drop to 2016 levels for at least the first half of this year. That should be good news for prices, of course.


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Now to NFU Scotland and its March regional meeting, near Kilmarnock, where yours truly received a mention from NFUS dairy policy and Scottish dairy hub manager Stuart Martin.

 

Under the top item ‘Dairy consultation on company contracts’, the lead action point read ‘members felt that the only people talking about contracts were Messrs Potter and Walkland, who were talking them down from a point of self interest’.

 

Two points immediately jumped out at me and some of the members present. Firstly, as previously stated in this column last year, farmers rarely, if ever, mention compulsory contract legislation. To that end, I agree: no-one else is talking about compulsory contracts.

 

I have previously explained in detail what I believe is the law of unintended consequences and how I (and Walkland) remain convinced compulsory contracts might lead to reduced farmgate milk prices.

 

Especially at a time when volumes are so high, and when your buyer has an obligation to buy every litre of milk you produce; something that may not be the case in the future if the NFU and NFUS have their way, and which some processors are already rubbing their hands with abject glee about.

 

To this day, neither the NFU nor the NFUS has guaranteed you will not be worse off. So, quite how it is ‘self interest’ for the pair of us to point out that you might be is a mystery.

 

Thus I invite any of the NFU members to put pen to paper or fingers to keyboards and enlighten me as to how you think our comments are ‘self interest’. By all means send a letter to the editor of Dairy Farmer with your line of thought if you do not wish to email me directly.

 

Interestingly, only four months before this meeting, I spoke at AgriScot, when this topic was raised by an NFUS position holder. Not a single farmer in a large room full said I had a self interest, and the Scots are not renowned for holding back.

There really are far more important issues for the industry to join together and tackle head on to grow the UK dairy cake, particularly your incomes (not mine or Walkland’s), rather than squabble over who has what share of a shrinking cake, which is exactly what the contracts issue does.

 

I must say that I have never previously been accused of adopting a self interest position, not even in my quota trading days, but I have regularly been upheld for standing up for what I believe in. And on each occasion, it has been with good reason, as is the case with my view on the NFU/Government intervention on contracts.

 

I await the responses because I am reliably informed that only about 20 members attended that meeting, and the minutes of the meeting’s action points do not say ‘several’ members, it refers to ‘members’, suggesting at least half of those attending were of this opinion. I am sure they would like to share their views.

 

I accept some readers criticise my forthright views, particularly the NFU/NFUS stormtroopers, who unquestionably believe that if the NFU/NFUS says black is white, or the earth is flat, then it must be so. Their ears slam shut to anyone who dares to counter their views.

 

I would like to think my articles are viewed as hard-hitting, informing readers as to what is going on behind closed doors and who is leading the industry down the garden path, or to a better place, or self-servingly to achieve a gong or to step up their own political ladder. It is about playing my part to keep our industry honest, accountable and wide awake, which involves some tough comments which some understandably squirm at.

 

So I await responses from many NFU members present at the meeting, or otherwise, and also from the NFUS itself, categorically stating why contract legislation will definitely not reduce your income. A letter from the Galston postcode area of Scotland will also be particularly interesting I think.

 

I received plenty of feedback on last month’s article about unwanted dairy bull calves, and also the revolution in plant-based dairy alternatives. So there is no excuse for not writing in.

 

Like many of you, I used to think that soya, almond and other plant-based so-called ‘milks’ were simply a fad, and like a mosquito biting an elephant’s backside. That has all changed very quickly, as the competition from plant-based alternatives has rapidly intensified. In the US, plant-based milks account for more than 13% of total US milk sales, and the figure is rising monthly.

 

Whether it is TV programmes, newspapers, restaurants or on the supermarket and grocery shop shelves, plant-based dairy alternatives are mainstream and now taking up shelf space dairy once occupied. They have consumer appeal and are a threat and an accepted substitute for cow’s milk, predominantly because they are being marketed as healthier and more ethical or animal and environmentally friendly. Our industry must learn from their success and take action.

 

Having said that, some now claim dairy ‘will never regain the lost sales’, so let’s stop squabbling over the share of the diminishing cake and work to build a bigger one. Because we all have a genuine self interest in that.

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