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Cut-throat processors pushing UK dairy farmers to the brink

As Arla slashes a huge 3.25ppl off milk cheques, dairy farmers have spoken of the huge impact processor cuts are having on their lives. Ben Briggs and Alistair Driver report.
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James and Judith Kirkbride are receiving just 15.75ppl but they need 25-26ppl to cover costs
James and Judith Kirkbride are receiving just 15.75ppl but they need 25-26ppl to cover costs

Desperate dairy farmers have this week spoken of the huge impact brutal processor cuts are having on their businesses and livelihoods.

 

Reflecting growing fears of a large-scale industry exodus, dairymen and women across England, Wales and Scotland told Farmers Guardian how the latest round of price reductions had left many thinking long and hard about their futures.

 

They also revealed the impact on the wider rural economy as bills to feed merchants, vets, contractors and other suppliers all backed up.

 

James and Judith Kirkbride, who farm more than 100 black and white cows on a Cornwall Council farm near Plymouth, said their dairy dreams were quickly unravelling after Arla slashed direct supplier milk cheques by a massive 3.25ppl from the start of March.

 

This was in the wake of Tesco’s decision to move 200 million litres of supply to Muller.

 

The couple, who moved to Cornwall in 2012 from a sheep farm in Cumbria, said they needed to make 25-26ppl to cover farm costs, but were now receiving just 15.75ppl, down from a high of 31ppl.

 

Mrs Kirkbride said: “The trouble is, when you are in this situation you start to have a backlog of creditors. It is a real struggle to cover rent and borrowings for our business.”

 

Saying they were considering all alternatives for the future of the farm, including processing some of their own milk or trying to find a different route to market, Mrs Kirkbride said processors and retailers were working against, not with, farmers.

 

She added: “The biggest shame is how processors [and retailers] have split farmers. They have created a massive divide between aligned and non-aligned. If we [non-aligned] are squeezed out of the industry, how long before processors try and split aligned farmers? No one is exempt.”

 

Meadow Foods supplier Richard Yates, who milks 100 Friesian cows in Shropshire, has seen his price fall from 32ppl to an A price of just 19ppl, blowing a huge hole in his accounts.

 

He is also one of thousands of farmers still waiting for waiting for their Basic Payment Scheme (BPS) money, with no idea when it will arrive.

 

“We have locked the cheque book away and are reviewing every cost on a daily basis but, after two years, I am getting fed up of saying this.

 

“There comes a point at which people have had enough of working for nothing. I know of a number of dairy producers who will struggle to see the summer.”

 

Ayrshire farmer Graeme Kilpatrick, who supplies an independent Scottish dairy, has seen more than £200,000 disappear from his milk income on the back of cuts of 8-9ppl.

 

With little sign of an upturn, he said: “This is worse than 2012. Everybody is slashing each others’ throats. Farmers need to gear their businesses up for survival for the next six to 12 months.”

 

NFU dairy board chairman Rob Harrison warned processors they risk ‘destroying their supply base’ unless they adopt ‘sensible pricing methods’.

 

 


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