Wednesday, July 18, 2012

Spotlight on The Dairy Crisis

The role of each party involved and why the minister might be deaf. 

A neighbouring dairy farmer dropped in yesterday...  "what can be done to get us out of this mess?" he asks. He's an efficient farmer, runs a herd of 140 cows with his son, and is very concerned about the milk price reductions due in August. 

I suggested farmers need to look at the components of the problem. What is the role of government? Of the farming unions as representatives of producers? Of milk buyers and, last but not least, the farmers themselves? Can farmers really expect Minister Jim Paice to order an increase in the milk price?

Practical Farm Ideas magazine helps farmers find new methods that improve efficiency. This blog shows how one farmer has gained real control over mastitis in his herd - with zero cases in 130 cows the year we visited him.

Home built back-flushing 

The SOS Milk Summit in London showed the passion, and the problems of milk producing farmers. Their anger towards minister Jim Paice was clear, as was his concern.  Farmers appeared satisfied with the NFU, who they pay to represent their interests. As I listened to the cheers given to the Chairman Meurig Raymond, the deputy NFU president, when he said that 'enough was enough', I was surprised not to hear farmers questioning whether the Union had done all it could.  

Today's problems need immediate solutions

Today we have a situation where a large number of farmers are having a 14% price cut imposed, at a time when costs have risen sharply. Whether the NFU has done enough with contracts, whether producers have done enough to raise milk awareness and make it less of a commodity... all these issues have no bearing on the situation faced today. 

Farmers facing a further 2p cut need to get their price restored to the 28p/litre which they were getting earlier this year. They shouldn't be trading on contracts which are so open and favour their buyers, when the farmer has such a long term investment and commitment to the business. 
Drawing attention to the problem through direct action is their best hope, short term. Their buyers might react and decide not to impose the August 2p cut. It will be a victory of sorts, but not one which solves the fundamental problem - that milk is vastly underpriced. 

Dairy farmers are divided into two groups.

A  - farmers with cost plus contracts from buyers are getting a much higher price than those outside these contracts, which include the Tesco Sustainable Dairy Group, Marks & Spencer, Waitrose. These retailers get a proportion - by no means all - of their milk from farmers on these schemes, and make up the rest from supplies from farms on contracts which allow buyers greater flexibility in the price they pay. Farmers are outside the gold plated schemes for many reasons. They may be in the wrong part of the country; have farms that are too small; can't afford to do the upgrades required; don't want to provide their buyer with their accounts and costings. 
B  - the bulk of milk producers are outside the schemes and supply on contracts which give the buyer huge flexibility, for many it means the only requirement is that the lorry turns up to collect.

The long term solution requires a major a change in the supply contracts. There needs to be a relationship between the gold plated ones, which are currently paying 30p, and the others. These and other changes can only occur when the farmer has sharper teeth, and that comes through group negotiation.

Despite the groans and jeers at Minister Jim Paice when he mentioned efficiency at the London meeting, individual farm efficiency is critical. There is a massive difference between the averagely good and the averagely bad milk producer. Back-flushing is one of vary many cost cutting ideas which Farm Ideas has discovered over the years. Farmers can be slow to change. They wait for the majority to take up innovations, as lose many years of benefits as a result.

The NFU have been working on contracts for many years, but it's difficult to judge progress. Now they are trying to implement a 'voluntary code' for milk contracts. Ten years ago, when prices were poor, Yorkshire dairy farmer John Loftus proposed a Milk Producers Federation which would negotiate en bloc with buyers. He gathered some support from local farmers, little if any from the unions, and when prices moved up interest in the idea faded. Now something similar, now called Producer Organisations, are being held as being the new way forward, despite the sad history of The Milk Group and Dairy Farmers of Great Britain. Farmers are still waiting for something conclusive from their representatives - like bulk negotiating. Publishing and promoting a pro-forma contract, which might include clauses such as buyers having to give farmers a minimum four weeks notice of price cuts. Making contracts non-exclusive. Freeing farmers to sell milk their over contract milk to the another buyer rather than it going at penalty prices. If contracts are changed to disadvantage the farmer he should be free to find another buyer, and not be saddled with a contract lasting many months. A published pro-forma contract would give the farmer something to work with when his contract is up for renewal, and might encourage farmers to negotiate together. 

The farmer can expect little but the minimum from his buyer, who is after all working for the shareholders and owners of the company. Farmers can influence buyers thinking, and lobby to soften any economic blow, but there will be no special cases or pleading. Retailers deal with producers all over the globe, some very much poorer than the average dairy farmer. 

Despite the hand wringing and words of support of the minister Jim Paice, government is, as always, in a cleft stick. Inflation is rising faster than wages. Unemployment remains high. Pushing up the price of food by raising the price of milk is no option, politically or legally. Keeping food prices down will win far more votes than encouraging them to be raised. So Minister Paice is in no position to provide much tangible help. Why spend so much time and effort asking him?

The housewife can be persuaded - for a short while and at considerable expense. But while she sees milk as a commodity, and one with a price she knows down to the last penny, her instinct will be to save money and buy cheap. 

Practical ways to improve your milk price

Mastitis hits 25% of cows each year

Mastitis is a heavy cost on some dairy farms. The N Ireland Dept of Agric reports that 25% of milking cows get clinical mastitis each year, and each new case costs £180, or £5,000 for every 100 cow herd. 

What would you say to a 130 cow farmer who had ZERO cases a year?

Ten years ago Wyn Williams introduced cluster dipping between cows, as he was convinced mastitis was largely transmitted by the milk liner. He dipped and soaked clusters between cows in a 2% dilute hypochlorite solution. Mastitis and cell counts dropped dramatically, so he kept doing it for five or more years. He then built a new parlour, and believed the dipping was no longer necessary, as the parlour was new, but cases and cell count started to rise, so the routine was resumed, and they then declined again. 
As herd size increased the need to get cows through the parlour quickly became more important, so Wyn designed and built a back-flush system which does all the units on one side of the parlour at a time. He had the system up and running after spending £1,300. His average cell count is 120 and in 2010 he had no cases of the disease.
If you want to see his NMR annual summary showing 0 (zero) and learn how the back-flush machine was built and fitted into the parlour you'll need to see Practical Farm Ideas Vol 18, issue 4. You can access the report from this web address.   It costs just 99p. Or buy Vol 18 issue 4 from the  website. 
The machine uses a standard workshop air compressor that propels a slug of dilute 5% paracetic acid back through the clusters. He back-flushes with a single lever which he holds on for just 5 seconds. The rinsing solution is made up using a Dosatron proportional dispenser, used widely in industry and medicine. The compressor means there is no added strain on the vacuum pump, and the manual control means the milker is in charge. 
The question is - how many farmers at the meeting had mastitis control as good as this?

Followup Action:

Go here for the back issue containing the full back-flushing article (£4.00 in UK)

Go here to read a report on the cost of mastitis to dairy farms

Go here to download the Practical Farm Ideas back-flushing article for 99p

Go here to read a Northern Echo article on co-operative negotiation

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