UPDATE: Bad weather, price pressure put UK milk supply in jeopardy - Wyke
UK milk herd could shrink if farmer returns do not rise - Wyke Farms
The UK could be facing a milk shortage in the next six months if processors and retailers fail to support dairy farmers facing the "double whammy" of price pressure and failing feed crops, Wyke Farms managing director Richard Clothier has warned.
Speaking to just-food, Clothier said the poor weather conditions this summer have left farmers short of foraging crops to feed their cattle over the winter. The rain has also pushed on-farm costs up because farmers are unable to put their herds out to graze.
"On our own farms our maize crops have failed and there is a shortage of winter food. There are going to be a lot of costs associated with buying in winter food to feed the cows in addition to price pressures, so it is a real double whammy for farmers. If we are not careful then the knock-on effect will be less milk in the back end of the year. We are already seeing our milk supply down by about 6-7%," Clothier said.
Clothier estimated the pressure from the feed shortage could push on-farm costs up by as much as 5 ppl.
"At this time, because of these unprecedented weather conditions, farmers need some support. There is a danger that price pressure combined with the weather conditions that we have had mean we could go through the winter short of milk and short of milk products."
According to Clothier, some farmers are already looking at ways to reduce herd sizes - by either culling or selling cows - because they will be unable to feed them over the winter. This represents a significant threat to the UK's milk supply because it takes around three years for a calf to develop into a milking cow. If the UK herd goes into decline, the consequences could be felt for years.
"This will drive the cost of milk products up to consumers and there won't be enough product to supply the market. The supply base is very fragile," Clothier suggested.
Wyke Farms has introduced a price increase of 0.5ppl for the milk it procures. "This is not enough," Clothier said. "But we are trying to turn the tide, change the momentum and encourage farmers to start feeding the cows."
Wyke Farms has been able to fund this price increase thanks to its "good relationships" with retailers, Clothier said.
"Our shoppers are supporting us. Our penetration from last year is up 30%. And we've managed to drive efficiencies within the business to try and take some costs out," he added.
Clothier said the UK's retailers should help fund higher farmgate milk prices.
"As an industry we need to sit down with the retailers and try and explain the situation. I'm not a big fan of aggressive action. I think sometimes it can be about talking. In the UK farmers are exposed because we have a very consolidated retail base. And that gives cheap food for shoppers. But it also means that the retailers' power is quite strong. We can't fight against them and win but we can talk to them and get them to understand that the farming community needs support... hopefully that will stimulate a change in procurement."
Clothier emphasised the issue of pricing pressure was not limited to liquid milk. While many retailers offer additional payments to farmers in their liquid milk pools, low prices for the milk used to make yoghurt, cheese and other dairy products are also hitting farm incomes.
"In the short term I'd like to see the whole industry coming together and saying look we have a problem with crop failure. We need to try and get some more money back to the producers so they can feed the cows over the winter and keep milk supplies up."
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