The dairy farming sector is not, as I was quoted as saying in The Grocer's The Dairymen supplement, dead. However, it is definitely in crisis. According to DairyCo data for the 12 months ending March 2009, farmers' gross margins continue at -3ppl, while processors' gross margins have soared 28% to 21.9ppl and retail gross margins have increased 2% to 19.1ppl.
In fact, we have been at the bottom of the EU milk league table for most of the past decade, during which the number of UK dairy farmers has halved to 17,060. The liquid milk shortfall doesn't stop in the UK. Similar dairy farming trends are being reported in other major producing countries including the USA and Russia.
The UK recorded a 1.46 billion-litre shortfall in milk production in 2008. That led to daily imports of approximately one million litres of liquid milk to meet its 18 million-litre daily requirement, together with a net total of 408,000 tonnes of cheese for the year.
These trends beg the question of whether processors, retailers and foodservice operators are content that the liquid milk requirement supplied by UK producers leaves them exposed to the vagaries of the import market for dairy products, in particular cheese and yoghurt. In view of the pending global shortfall, we would urge these three parties to work with farmers to offer a fair farmgate milk price and ensure a secure supply of milk and dairy products or else risk a shortfall and inflated prices.
Lyndon Edwards, chairman, Royal Association of British Dairy Farmers
In fact, we have been at the bottom of the EU milk league table for most of the past decade, during which the number of UK dairy farmers has halved to 17,060. The liquid milk shortfall doesn't stop in the UK. Similar dairy farming trends are being reported in other major producing countries including the USA and Russia.
The UK recorded a 1.46 billion-litre shortfall in milk production in 2008. That led to daily imports of approximately one million litres of liquid milk to meet its 18 million-litre daily requirement, together with a net total of 408,000 tonnes of cheese for the year.
These trends beg the question of whether processors, retailers and foodservice operators are content that the liquid milk requirement supplied by UK producers leaves them exposed to the vagaries of the import market for dairy products, in particular cheese and yoghurt. In view of the pending global shortfall, we would urge these three parties to work with farmers to offer a fair farmgate milk price and ensure a secure supply of milk and dairy products or else risk a shortfall and inflated prices.
Lyndon Edwards, chairman, Royal Association of British Dairy Farmers
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