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Phil Latham: The winter routine is kicking in, and a way ahead needed for better milk price

Insights

There is no doubt it has been a grassy kind of year, prolific growth, dry grazing conditions and a mild autumn to date, but all good things must come to an end and we are heading towards winter routine.

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Our maize is in the clamp and the only cropping work left to do is to sow some winter wheat and spray some nettles in the haylage reseeds. Our equestrian events are also over now until spring so there is less need to rush around outside and it is time to get crunching numbers to assess the financial implications of what is going on.

 

High on the list of priorities is to assess the impact on our budget of the milk price drops we are getting. There is no doubt there has been more milk produced locally and globally and there are fewer international opportunities to move volume abroad which has resulted in a lower price at the farm gate. I do not expect we can buck the market; the best thing is to plan for the reduced price and remain focused on the pursuit of margin.

Vet costs

We have finally made time for vet cost (investment) meeting, the upshot of which was while our grazing plan has worked well, our cows paid a price for the pursuit of milk from forage and we will need better tactics next spring to ensure optimal health and fertility.

 

I remain unconvinced about the latest round of dairy protests. I agree we want a fair price and a fair share of the available margin which supermarkets enjoy. I agree while the big supermarkets tempt consumer footfall with discounts on milk to try and stem the growth of Aldi, Lidl and Iceland’s market share that they appear to be driving prices down. What confuses me is why kicking the nearest dairy processor in the shins is a good strategy to address our inherent weakness in negotiating a better price, or how that changes the simple economics of supply and demand.

 

Protests are great for getting public support, but surely we need something more tangible as an objective to ensure we get a sustainable margin for our businesses. Consumers value savings and we should not be reliant on begging bowl tactics to survive. Surely we should be able to get past the petty politics and work together with some vision, or there will be many more nights spent out in the cold for many producers.

 

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