Saturday, July 14, 2012

SOS dairy farmers

This is a letter I'm sending to my milk supplier and my MP:
Mike Sheldon
Dairy Crest
Claygate House
Littleworth Road
Surrey, KT10 9PN

Dear Mr Sheldon,

I was very sorry to hear that Dairy Crest is dropping its standard liquid agreement milk price by 1.65p per litre from 1 August 2012, leaving farmers with 24.92 per litre.

I read that milk retailers blame the price cuts on “market forces”, which doesn’t make sense to me.

Customers have been used to low prices because of competition, but this can’t be sustained in the long term if it forces farmers out of business and we come to rely on cheap imported milk and milk products from countries that have lower welfare standards and pay lower wages. I would rather that we continued to support British farmers, for all sorts of reasons.

British consumers are paying 99p per litre for Coca-Cola, which has no nutritional value; they should be educated to expect to pay a realistic price for milk, which does.

In my youth I worked on dairy farms and know how much time and effort goes into a doorstep pinta. I fully support the NFU and Farmers’ Weekly milk prices campaign. I’m informed that Kite consultants estimate the average break even cost to produce milk on farm is 29.3 pence per litre. Over the last year, cost pressures on farmers, such fresh calved heifer replacements (+14.7%), fresh calved cows (+29.8%), Soya (+15%), maize gluten (+11.9%) (Source Dairy Co April 2011 vs April 2012), have contributed to significantly increase their costs to produce milk, and they’ve also had to cope with the consequences of the bad weather.
I currently have organic semi-skimmed milk delivered in glass bottles (avoiding plastic) via Milk & More, so I’m already paying more than a majority of customers but would be willing to pay whatever is fair to the farmers who produce it. Incidentally, where does my milk come from?

I urge you to reverse the decision to cut milk prices and to pay farmers a sustainable rate.

Yours sincerely, etc.

Click here to read about the NFU's campaign
Click here to read more at Farmers' Weekly


Margaret Nelson said...

The Co-op has changed its mind:

BBC News - Co-op to increase milk payments after farmer protests

Margaret Nelson said...

Had a reply from my MP but nothing (so far) from Dairy Crest.

Dear Ms Nelson

Thank you for your email of 14 July.

I appreciate the recent decision by many milk processors to cut the price paid to dairy farmers for their liquid milk is causing significant anxiety.

The Government is taking a number of actions to help support dairy farmers, including:

Providing up to £5 million in additional funds under the Rural Economy Grant scheme for high quality projects from the dairy industry, in particular from groups of producers, which will help to increase their competitiveness and added value to boost their market returns.

Working closely with industry to drive forward the agreement of a voluntary code of practice between dairy farmers and purchasers to establish improved contractual terms and conditions including greater price transparency.

Introducing the Grocery Code Adjudicator in this Parliamentary session which will protect suppliers by ensuring that large retailers treat them fairly by upholding the Groceries Supply Code of Practice.

Enabling farmers to establish Producer Organisations in accordance with the EU Dairy Package. As well as giving them greater power to negotiate contracts (including price) it is a crucial means by which farmers can come together to improve their market orientation, efficiency, competitiveness, profitability and therefore long-term sustainability.

Farmers play an important role in rural communities and supporting them is a top priority.

Yours sincerely

Tim Yeo

Margaret Nelson said...

Reply from Dairy Crest.

Dear Ms Nelson

Thank you for taking the time to contact us regarding your concerns about the milk price we pay our farmers, feedback from our customers, negative and positive, is always valuable.

You will be familiar with what is involved in producing milk from the time you have
spent on dairy farms but l would like to explain how we work with our farmers. Dairy Crest sources nearly 80% of the milk it requires direct from farms located throughout England and South Wales. The majority of these farms have supplied us for many years and they are greatly valued by our business. We are very proud of the high quality milk they produce and the standards to which they farm.

Our announcement to reduce the milk price we pay to our farmers on a standard liquid contract is a result of dairy markets continuing to be very weak, particularly for cream and a very tough retail environment. We are very aware of the impact this could have on some of our farmers, which is why we have delayed reducing our milk price for as long as we could. This action was only considered after all other options to reduce cost had been put into place including the consultation to close two of our dairy sites with the loss of nearly 500 jobs, depot closures and head office redundancies.

We are doing everything we can to support our farmers at this time. We are the only processor to introduce a price floor until the end of the year and we have given our farmers an assurance that we will increase the milk price as soon as market conditions allow. We are also working closely with the organisation that represents our farmers to review our milk supply contracts and the mechanism for setting our milk prices.

As the only major British milk processing company, a sustainable supply of British milk is essential to our business and our policy has never been to under pay our farmers.

With regard to your question about where your Organic bottled milk comes from, I can confirm that Oxfordshire and Hamshire [sic] area.

Finally, l hope that you are pleased with the service that you receive from your milkman and that you will continue to be a customer and enjoy the benefits of what this very traditional British service can provide to our customers and communities.

Kind regards
Toby Brinsmead
Managing Director, Dairies