Tag Archives: Milk Marketing Board

Dairy farmer writes: input costs have soared as farmgate price drops

Another Lancashire dairy farmer (a few of her herd, right) responds:

Not only was the average price UK dairy farmers received for their milk in 2015 lower than it was when the MMB was abolished 24 years ago, but it was 24% lower, and that was before farm gate prices last year suddenly plummeted by 1/3. 

No producer ought to be losing vast sums of money for their hard effort when producers are mainly exploited by those who can.

The cost of basic utilities and inputs required to produce that milk has risen:

  • water has increased by 137% in the same period since 1994 due to  companies being able to automatically raise their prices annually by the rate of inflation
  • similarly the price of electricity over that period increased by 207%  
  • Animal feed costs up 58%  
  • fertiliser up 114%
  • and diesel 224% 

and that is another reason that the number of dairy herds in the UK has collapsed – as input pricing is so much out of kilter with the farm gate price.

 

 

 

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Food security 10: British dairy production at risk

 

Pre-empting qualms about the health impacts of dairy products, from Lancashire dairy farmer Tom Rigby’s retweet we note the findings of professor of food chain nutrition Ian Givens and his colleagues from Reading University, Copenhagen University and Wageningen University in the Netherlands. They analysed 29 studies involving 938,465 participants from around the world undertaken over the last 35 years, including five done in the UK. “No associations were found for total (high-fat/low-fat) dairy and milk with the health outcomes of mortality, CHD or CVD,” they said. In fact, they added, fermented dairy products may potentially slightly lower the risk of having a heart attack or stroke.

A new hazard is being added to the long-term imposition of payments below the cost of production

As dairy farms close, due to unviable prices, the distances between farms is growing and providing a tanker to collect their milk is too expensive. The East Anglian Times reports that Muller has announced that it will close its Chadwell Heath depot in London and no longer collect the milk from 18 dairy farms across Norfolk, Suffolk. Essex and Kent. This follows the closure of two Scottish plants by Muller last year.

The 18 dairy farms who are to have their milk supply contracts cancelled by Muller have been given 12 months from the end of March to find new buyers for their milk at a price that offers them a viable future – one commentator adds gloomily:

“Given current trends it won’t be long before it will be possible to drive from Dover to York without seeing a single dairy cow”.

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A brief history for visiting readers from other countries (left, Jan-May)

The number of dairy farms across the UK has fallen dramatically since the Milk Marketing Board (MMB) was abolished in I993 by a Conservative government that saw it as “anti-competitive”.  In the period 2013-2016 alone, Business Matters reports that 1022 farms have closed. The MMB was created by an act of Parliament in the 1930s to ensure that all UK dairy farmers were paid the same price for their milk and that they shared milk collection charges regardless of where they farmed. This was to stop dairy farmers being bullied by over-powerful dairy companies who were establishing virtual regional monopolies.

Since the MMB was broken up, farmers have had to negotiate terms with processors individually and this ‘free trade’ has benefitted the milk processing companies and now the average price UK dairy farmers received for their milk last year was lower than it was when the MMB was abolished 24 years ago – and that is the main reason that the number of dairy herds in the UK has collapsed.

 

 

As the farmgate price of milk, wheat and other food continues to fall, farmers say: “Just tell us if you don’t want our food”

Are readers content for their food to come from countries with less strict regulation – as long as it is cheap?

milk 2 marketing boardPrivate Eye (1412) notes that many dairy farmers now regret the passing of the Milk Marketing Board of low prices and price volatility. It continues by saying that in 1993, when the MMB was abolished, there were 40,000 dairy farmers: now there are 13,000 and the number is falling fast.

In the Financial Times today, Scheherazade Daneshkhu, Consumer Industries Editor reports that British farmers borrowed £17.8bn in 2015, driven by cash flow problems, due to the sharp drop in the price of milk, wheat and other commodities that have squeezed profits and hit incomes, according to the National Farmers Union. Average prices for milk and wheat have fallen more than 30% during the past two years, while pig-meat prices are at a six-year low.

WT farmgate prices

Northern Ireland farmer William Taylor and colleagues from farming organisations have recommended the public to tell them if their food is not needed. But if they indicate this by failing to support the political campaigning undertaken by a wide range of food producers in that country, they will be foolishly short-sighted.

Once foreign suppliers have cornered the market – as our farmers move to other occupations – the prices will be whatever the suppliers want to make it.

Britain will be a captive market.

Food supply: a farmer is angered by state media misinformation

A paragraph in an emailed message received from a Lancashire farmer said: “I am truly incensed with what I heard on the BBC R4 report this morning on the dairy farming situation and was appalled by what was mostly utter and misleading rubbish and pure propaganda”.

Often it is implied that farmers want the shopper to pay a higher price.

andrew hemmingThis is probably a ‘divide and rule’ tactic and is not true. Farmers like Andrew Hemming, the late vice-chairman of Farmers for Action (right), actually believe that shoppers are paying a good price and should not pay more. Milk producers want to have a better share from the supermarket-paid processor to come from the profit margins of these well-paid middlemen.

Market pundits say that the low milk price was due to surplus production

But only 85% of milk in Britain is produced by British dairy farmers – so there is no national surplus.

On Radio 4, unchallenged, it was said that the farmers threw out the milk board & it now serves them right.

I checked: Mrs Thatcher decided to abolish the Milk Marketing Board (below: 1983 stamp). Our farming informant adds that at the time the EU mounted a number of legal challenges against the end use pricing system that operated at the time under competition laws and also the state owned marketing board was against the free market philosophy.

mmb 2 1983Farmer Anthony Bradley in the Guardian recalls,“In the 1930s our grandad could remember putting milk and butter on the train and sending it to Bradford or Leeds. But some days it was sent back, without payment, and the family pig had a large meal . . . This abuse of market power, made worse by dealing with a perishable product, was one of the reasons the board was established. It took the uncertainty out of the market and allowed farmers to plan. This was vital, as a cow cannot be switched off when your milk buyer changes their mind. The MMB pooled all the milk and then marketed it together. Then Mrs Thatcher decided to abolish the Milk Marketing Board.

The powerful corporate lobby is desperate to preserve the highest profits

Producers of perishable food will continue to suffer and be held to ransom in turn.

top 20 cap tableThey will again be told by the corporates’ economist, Sean Rickard, and be told to ‘go and live off your subsidy’.

Our farmer reminds him of the figures which have been publicised for years. These show that the already rich large and/or corporate landholders receive most of the subsidy cash –  a few named opposite – with Arla heading the list in Denmark and adds:

“We have never claimed any subsidy other than the very basic payment which helps to pay the bills we would be able to pay if we were paid a proper value for our produce”.

fda tableGovernment advocates producing food for export – aiding the get rich quick commodities speculator.

America is already said to be ‘losing the battle’ against tainted imported food and already publishes figures on this issue, showing comparatively few inspections (left).

Britain keeps quiet.

If the public remains uninformed and silent, in turn they will eventually be held to ransom, relying even further on ever more expensive imported food, sometimes produced by dubious if not dangerous methods.