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Potter's View: ‘Our marketing and dairy promotion teams are not in the same league as those of CIWF’

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This month Dairy Farmer columnist Ian Potter looks at the future role of Westbury and questions the current stance being adopted by the RSPCA, particularly as regards the badger cull.

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The New Year begins with Arla continuing to roll out its UK strategy, in what looks like another shrewd move - to acquire the freehold of Westbury Dairy from the Lloyds’ receivers. There can be no doubt that this plant, which came at a cost to many farmers who invested at the start, is Arla UK’s pathway to the currently buoyant Global Dairy Trade Auction and will be needed more than ever this spring. With a giant flush expected, the dairy industry would be in one heck of a mess without it, with distress milk everywhere. Some might still prove to be a problem if production overtakes our processing capacity, especially if it is coupled with milk coming over from Ireland.

 

With Arla now owning the freehold, First Milk (a J/V tenant partner) has two choices. It can continue to be part of the J/V with Arla, or could sell its share to Arla (or perhaps another party), which, with SMP prices being what they are, will now be worth a lot of money. First Milk could then utilise this capital elsewhere in the business. A lot will depend on how much milk they have to put through Westbury, having committed more than 40% of their milk to cheese destined for Adams Foods (Competition Commission allowing, still).

 

During the past year or so I have done a bit of travelling, in particular to two challenging areas for milking cows - Norway and the Shetlands. In Norway I visited one of the largest herds (120 cows), producing one million litres via robots. The farm’s margin was considered ‘okay’ at over 8ppl. However, the cost of production fails to account for any family labour costs, a point I suggested they should address ASAP.

 

Dairy farmers there face special challenges, where three consecutive dry days for silaging are considered a luxury. Marry this to the huge challenge of attracting good employees due to the huge competition from the oil economy which in contrast pays exceptionally high wages, and I am sure you get the picture.

 

The smaller farmers receive dairy cow headage payments (excluded from the 8ppl margin) - with up to 16 cows at £400/head, decreasing to zero for 50 cow plus herds It’s called a multi-level subsidy with rates in the less favoured northern parts higher than those in the south. I guess one thing in Norway’s favour is the fact its oil industry produces significant tax revenue, which is why its agricultural subsidy is three times higher than the global average.

 

In the Shetlands, only four dairy farmers survive now, with a total of 300 cows on islands with no trees or badgers, but on very disadvantaged land indeed. This (at best) can only be grazed from mid-May to mid-September. And they also have to contend with more than 1000 Greylag

 

Geese, which hoover up their valuable grass in front of your eyes. The best land is worth £2000 an acre, and their current milk price is 37ppl. In both the Shetlands and Norway there will simply have to be policy measures to protect dairy farmers, especially from the inevitable price volatility. These farmers need a subsidy.

 

In Norway, the entrepreneurial farmers appear to pray for fortress Norway, much the same way Canadian farmers did with import protection. And in the Shetlands they wish Tesco would shut up shop or stop selling non-Shetland Isles liquid milk and cheese in their Lerwick store for the identical price we pay in middle England, for example.

 

I have always kept a watching brief on organisations such as Compassion in World Farming (CIWF). Just before Christmas I received an email which was its take on the 12 days of Christmas song. I confess it was very professional, and showed what those who promote large-scale units are up against. Our marketing and dairy promotion teams are not in the same league as those of CIWF (or indeed the promotional films I have featured on my website in 2013, as produced by dairy promotion agencies around the world). In Britain we just don’t seem to have the flair and creativity.

 

I also keep an eye on the RSPCA’s activities. For sure its press coverage in 2013 has slid from bad to worse. Radio 4 did one of its Face the Facts programmes on the organisation recently, where it was dubbed as ‘heavy handed and abusing its informal power’. According to the researchers, RSPCA prosecutions have escalated ‘out of control’ in the space of two years from 2500 (in 2010) to a staggering 4000 in 2012, as have their joint raids with the police. Only the Crown Prosecution Service (CPS) brings more prosecutions than the RSPCA.

 

It’s little wonder some suggest the publicity from the prosecutions is viewed as helping to raise funds.

 

Like me you will be aghast to hear the case of the 68-year-old lady who was ousted from her cottage during an RSPCA raid and told to sit in the garden in her nightshirt, or of instances where it has seized animals and destroyed them (following which it was proven there were no welfare problems).

 

But what riles more than anything is the organisation’s insatiable appetite to stop the badger cull. Its CEO publically called for farmers involved to be named, and for a boycott of milk coming from the cull areas, remember. This was, in my opinion, bang out of order and should be condemned by all dairy farmers. Perhaps it’s time for their CEO to be invited to give his side of the story at either next year’s Semex or NFU conferences.

 

I was a previous winner of an RSPCA Freedom Foods Award. However given its negative 2013 press coverage I think I will remove this from my CV. Instead I will sit back and watch with interest to see if the organisation will ensure its reputation undergoes a U-turn in 2014, and whether its campaigns are well-thought out, or whether it will further deteriorate.

About Ian Potter

Ian is a specialist milk quota and entitlement broker. Comments please to ianpotter@ipaquotas.co.uk

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