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Dairy industry sees thousands of litres of milk dumped due to Covid-19’s impact on supply chains

Recent milk market turmoil has led the dairy industry to call for a Government support package to give farmers a much-needed lifeline to negate falling milk prices and delayed payments.

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Dairy industry sees thousands of litres of milk dumped due to Covid-19’s impact on supply chains

Swathes of farmers across the UK have been told by their processors to dump milk as of April 5, with many taking to social media to voice their heartbreak at the situation.

 

Llyr Griffiths, a fourth generation dairy farmer from Wales and Freshways supplier, said: “The situation is extremely bleak. It was heart-breaking to watch 11,500 litres of milk pouring down the drain.

 

“We have been told if the tanker does not turn up each day then we are to dump the milk.”

 

“Our overdraft is already in excess of £200,000 to cover the shortfall and the crisis could not have come at a worse time financially for us, with rent, fertiliser and feed bills all coming through."

 

It is estimated one-quarter of British producers could be adversely impacted by the situation and about 25 per cent of dairy farmers in Wales supplying processors have already been affected.

 


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Abi Reader, NFU Cymru dairy chairwoman, said: “I am devastated for those who have had to pour milk away and having had first-hand experience of unpaid milk cheques, I hope the situation is short lived for all affected.”

 

“There is no denying the dairy sector is in a crisis that is escalating quickly and I am very nervous about the unintended consequences we may not be able to foresee.”

 

’Bailout package’

 

A bailout package has been put forward by the Royal Association of British Dairy Farmers (RABDF) to Defra on April 7.

 

The reimbursement scheme would see around 300 eligible conventional dairy farmers receive 25ppl via a monthly milk cheque paid by Government.

 

Peter Alvis, chairman of RABDF, said: “This scheme will ensure both short-term and longer-term food security and ease the stress on the industry.

 

“Removing excess distressed milk from the market place will help stabilise the current spot price without causing long-term market distortion. It will also allow those affected dairy farmers to continue to pay for invoices for farm inputs to the wider local/rural supply industry beyond the farm gate and will prevent extra cows being culled which will exacerbate the problems in the beef supply chain”.

 

However, the support will only be available to dairy farmers supplying a processor which evidences trading has been affected solely from Covid-19 impacts, and will not cover farmers being fully paid or covered by insurance.

 

Working together

NFU President Minette Batters has called on Defra Secretary of State, George Eustice, to a crisis meeting (April 9) and to take immediate steps to ensure the sustainability of the dairy sector.

 

She said: “For weeks now, we have been flagging to government in our daily calls the issues within the dairy sector and working with Defra to try and find solutions. But the situation is becoming untenable.

 

"Only four weeks ago all of this milk was being used, losing businesses at this stage will leave consumers reliant on convenience stores and other difficult to reach outlets not being able to have access to the same supply of milk.

 

“We believe there may be at least 2,000 dairy farmers suffering severe financial pressure and that number is growing by the day as a result of the impacts of the coronavirus outbreak and as things develop very few dairy businesses will be left unaffected.

 

"We need to move fast to mitigate the impacts of this unfolding crisis on dairy farming businesses across the country.

 

“The Secretary of State needs to step in now and take urgent and decisive action, before it is too late and many of those iconic dairy businesses go to the wall.”

 

Environment Secretary, George Eustice, said: “I know this is a challenging time for the industry, and this afternoon (April 9) I had another constructive call with NFU President Minette Batters to discuss these issues, and the dairy sector in particular.

 

"I welcome the initiative from milk suppliers and their farmers to temporarily reduce the amounts they are producing, so that when the demand returns our dairy farmers can once again rise to meet that.

“We have temporarily relaxed Competition Laws to enable retailers, their suppliers and logistic services to work together to feed the nation.
"I also urge any farm business to access the loans that are available – like other businesses across the UK, they can access loans of up to £5 million from their bank, with the first year of payments interest-free.
“I will remain in regular contact with the NFU and other representatives from the dairy sector to ensure they are supported through this difficult period.”

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