UK dairy farmers lead by example

Last week I went on a mission to Wales to attend the Royal Welsh Show.

It’s akin to our own National Ploughing Championships, with one notable difference — there is no ploughing.

The Royal Welsh show is permanently situated in the town of Builth Wells in mid-Wales, not far from Hereford in England.

It is a massive event on the UK’s agri-calendar, which was reflected in the attendance figure of 240,140 over the four days. This huge attendance was a show record, proving that farming is getting a lot of attention right now.

I was surprised by the number of young people, including a large cohort of young ladies togged out in pink and flowery fashion willies, despite temperatures being close to 30 degrees on each of the four days.

This is the pinnacle for UK agriculture and an opportunity for them to showcase their best — including more than 3,400 horses, 800 cattle, 3,500 sheep covering more than 45 separate breeds — not to mention pigs, goats, poultry, and other animals.

The challenges facing UK and Irish agriculture are not very different.

The National Farming Union was quite active at the show, and one of the major issues for them is milk price, and the long-term decline in the UK dairy industry.

The UK has been consistently under quota for years, and the numbers involved in dairy farming have more than halved since 1996, and now stand at less than 15,000, which is surprising when you think that the numbers in Ireland stand at about 18,000.

The absence of dairy farms was noticeable in much of the surrounding countryside. It was nearly a two-hour drive south-eastwards into Somerset before I saw a decent tract of dairy farms.

Given that we share many of the characteristics of our UK neighbours, it shows by extension how fragile our own dairy industry could be.

The relative success of the Irish dairy industry is in no small part due to the work of progressive, competitive, and successful Irish dairy co-ops, the Irish Dairy Board, high quality advisory services, and our dairy farmers, who have adapted and rose to the challenge of becoming more competitive. The absence of a strong marketing power following the deregulation of the Milk Marketing Board has left the UK in this sorry position, which is an eye opener as regards the need to maintain an overall strategy after the abolition if milk quotas, to ensure that Ireland’s processors do not end up fighting against each other in a race to the bottom.

Significant protests by UK dairy farmers over the past couple of months looked like bearing fruit just in time for the Welsh Show — due, I suspect, to a move by retailers who wanted to be painted in a positive light.

Agreements between UK supermarkets and the processors will deliver a small increase in milk prices which can be passed on by processors to farmers.

UK farmer were set to get the equivalent of 33 cent a litre from August onwards, but this is now expected to be close to 36 cent.

It was a successful campaign by the NFU, bringing pressure on the retail multiples not only from farmers but also from the public. One by one, the retailers have been bowing to pressure, in an effort to show their support for the UK dairy industry.

Now, Irish dairy prices are as much as 20% behind UK farm-gate levels. This year is turning out a disaster for Irish dairy farmers, somewhat of a repeat of 2009.

Being export-based, Irish dairy farmers have no power to manipulate foreign retailers for price increases.

We are in effect price takers in a commodity market. This underpins why we need effective policies at processor, farmer and government levels for coping with dairy price volatility.

Over the coming weeks I will look at other bits of interest from our UK neighbours.


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