‘Milk is being retailed as a throwaway commodity’

February 17, 2015

David Handley

MILK MATTERS: David Handley, who said that the Government says milk is the second most important food item that shoppers purchase.

 

ONE of dairy farming’s most familiar voices has told its members to fight for its future and challenged retailers to be more respectful of their suppliers.

These were some of the highlights Farmers For Action chairman David Handley made in his half-hour speech to the Semex dairy conference in January. It took me two hours to work through and has enabled me to get greater understanding of what is happening to this industry.

He said that if prices didn’t improve by April, he would be selling up his equipment and said in a forthright manner what was behind his thinking.

“If anyone thinks I am going to run a business and be raped, they’ve got another thing coming. Princes to paupers in a matter of 18 months.

“Elite to in the gutter within 18 months – a 10p differential between the dairy farmers at the top and the bottom. Corporate responsibility – they don’t know the meaning of the word. Morals and ethics – they don’t know the meaning of the word.

“And why should they? They’re businessmen and have to sustain their profit. We have a supply chain with plenty of money – why don’t we get some of it? Look at how many dairy farmers we have lost in eight years and how many of you today are financially better off.

“We’ve got Frontera; Dairy Farmers of America; we’ve got Europe and Arla working together. We have the 10p litre elite working to the bottom – not sustainable. If anyone thinks they will be last man standing and profitable – dream on.”

Mr Handley said that dairy farmers and other sectors needed to do more to educate the public as to what they do and how they produce their milk and get out there and sell their industry.

On hearing this first time, I am aware of the presence of the industry at events such as the New Forest Show and the Dorchester Show, particularly Johnny Ball of the NFU’s Lets Talk Farming Roadshow. Should more be done?

David said: “We have a levy board in the dairy industry taking £7M of our money yet we have a Dairy Council that is starved of money, that could take a portion of our money, get it match-funded in Europe and help to promote our product – not directly, that is the job of the processor to sell the product they produce.

“The Government states that if you take the top of the milk bottle it is probably the second most important food your family can have and yet it is being sold as a throwaway commodity.

“I say ‘disgrace’ to every retailer – you should hang your head in shame. Every retailer should be linking what they pay for milk to our price so that we can actually see a small amount in the supply chain of where the money is going.

“One supermarket chain one week before they took the last price drop sold 32,000 two litre units. Within one week of devaluing your product they sold 132,000 two litre units. They didn’t increase consumption – they just took it off Asda, Tesco and Sainsbury’s.

“As both the managing directors said, we need feet through our door and we will continue to use milk, eggs and bread to do it – it’s of no concern to you. I’m telling retailers loud and clear it is of grave concern to me.

“Basic economics show that if you continue to devalue a product to such a level that it becomes a throwaway commodity, you are sucking the life blood out of the supply chain and a year down the line, there will not be enough money to go around. If you don’t stand up and fight for your industry, you will lose it.”

I don’t claim to be an expert on the market but David talks about a temporary market intervention measure in the following part of his speech and it was touched upon on my site in information supplied to me by Tim Knapman.

What I would also add is we are living in dangerous times and the civil war in Ukraine; the dangers of ISIS and Al Qaeda in the Middle East and the spread of Ebola are all issues that must make food security a totemic issue as well as the wider threat to the rural community of supermarket price wars across all sectors.

Forgive me for using a biblical analogy but it seems that certain politicians are either in denial about world events or they are either spiritually blind or deaf, as are large sections of the media (farming and some main countryside press excluded) seem to be looking three weeks ahead, not a year down the line.

There must be an intervention on the price for a temporary period as the aforementioned threats to world security listed above are beyond the market’s control, like the Russian boycott of EU dairy products due to the situation in Ukraine.

David said: “We are in the mire but what can we do? The European Union could act very quickly by raising the intervention price to as high as 25/26p.

“It is short-term but it may give some breathing space. The British retailer – if it wanted to – could raise the value of our product and immediately inject money into the supply chain.

“We got cheese being labelled with four countries of origin on it. I understand why that company does that – they explained it very well to me – but no way, let’s have a clear and concise label as to where does it come from. If we get beaten as British by the consumer – that is called the market working and we’ve got to get better marketing and advertising and move things forward and the consumer will come.”

 

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