Fairness and planning can drive dairy sector

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Fair contracts which give farmers confidence to invest in milk production and increase efficiencies will put British dairying in prime position to become an international success story, according to the English NFU.

In its vision document for the future of British dairying, the NFU said the industry had a bright future, provided opportunities for growth equivalent to four to five billions litres per annum were seized.

The strategy was unveiled this week at the Livestock Event in Birmingham where the union claimed British dairying could be at the forefront of dairy production, if the industry worked together.

Urging producers, processors and retailers to work towards more equitable contractual relationships, it says a competitive supply chain would give the industry the confidence and ability to invest and make efficiencies.

The document, Compete to Grow, describes the UK as having an “already efficient, but potentially highly efficient dairy farm base”.

If farmers were paid a market price that enabled them to make on-going investment of 3.5p per litre, then farm expansion, efficiency gains and new entrants to the industry could allow output to expand to the required levels, it adds.

Mansel Raymond, chairman of the NFU dairy board, said growing global populations and demand for dairy products meant he was confident British dairying had a bright future, provided the industry worked together.

“Over the past ten years, milk production in Britain has been in a continuing decline which is no good for consumers, retailers, processors or dairy farmers,” he said. “With joined-up thinking, there’s no reason why we can’t turn around the decline and move forward.

“We have been 2-3p per litre behind our European colleagues and that money is money for investment, [the lack of which] has held us back from being efficient.”

But Raymond warned that growth at the farmgate would only happen in conjunction with increased processing capacity.

“While much has been said about investment in liquid milk processing, growth will also require more state-of-the-art processing capacity for other dairy products,” he said.

The launch of the NFU’s document came as the Royal Association of British Dairy Farmers said the prospects for UK milk producers looked brighter over the next couple of years.

Its chairman, Ian Macalpine, admitted the past 12 months had been challenging for producers, but he had optimism for growth within the industry.

“All the signals are that the world market should give the industry an opportunity to thrive in the future and we are enthusiastic and optimistic about the future.”