Despite some quite difficult weather through the first ten months of the year, the start of winter should finally see most dairy farms almost back on an even keel following some 18 months of fairly severe trading conditions.
The improving milk price is now back up to a level where most farmers are presently not losing money after the recent period of quite extreme losses. Certain groups selling to certain buyers were reported during the period to be receiving a price down to around 10 pence per litre: indeed we ourselves were losing some 11-12 pence per litre for much of last year. Other groups meanwhile, who seem happy to accept jumping through pretty severe hoops, were getting more than 30ppl during those troubled times. However one suspects meeting their buyers’ tough conditions would have probably soaked up much of their premium.
Like all our fellow dairymen we do need a fair pricing formula, if only to allow businesses a chance to recover from the bad times and reinvest again for the future. Of course one accepts there are periods when any business has to draw on its reserves but we have really been doing just that quite consistently on and off over a number of years, perhaps since 1994. It has been a very uncertain ride for close on 22 years. There have been a few short periods of respite certainly, but it’s no wonder so many of our fellow dairymen have long gone from milking. Reserves, and confidence, are indeed running quite low, and in some cases on empty.
Let’s just hope Europe settles down for a while now and the European Union’s negotiators (plus a few UK politicians) cease their efforts to sabotage the wishes of the British people. Things are generally in a mess, although its certainly not just due the June 2016 referendum. Where will our agricultural labour force of tomorrow be coming from for example, if not from Europe? Can our cattle farmers survive more of the endless, almost crippling, wearing inevitability of TB breakdowns and political shortcomings?
One must mention here the rather disconcerting rumblings emanating around dairy units following a couple of TB outbreaks in previously clean herds this year in our still, thankfully, largely clean area. It appears there are concerns among industry insiders over a perceived link involving lorry movements from farms, mainly of animals to slaughter. If there is substance to these fears it will doubtless worry everyone involved, while reflecting unfairly on many others, farmers and hauliers alike. Information from farmers about TB outbreaks is always hard to come by at the best of times, although I was told about this quite unsolicited from a very reliable third party recently. We all have to be so careful, insist on clean lorries and keep non essential vehicles away from our animals where possible.
Much concern was also caused during the early summer regarding a local anaerobic digestion (AD) plant here in West Sussex which was reportedly in breach of its planning conditions. It has since been subject to an inquiry which doesn’t, I understand, appear too favourable. As so much more maize is now being grown to supply feedstock to these plants in the South East, this event naturally created some uncertainty as to what would happen to (the then) current crop if, in the worst case scenario, the plant was ordered to be closed down.
Some of the problem appears to be exacerbated by the continuing unsatisfactory cereal returns, causing many arable farms to increasingly turn to AD for maize as a ‘get out of trouble’ crop, leading to its increased production. Yet this week I have heard it reported that another local AD plant, a big user of maize for feedstock, has said they won’t want any more of the crop next year. So where now?
Finally back to the dairy unit. It is just over a year since our great technological move into robotic milking ended. Not that the initial move, to robotics itself, was such a mistake – premature perhaps, but not a mistake. The main issues were the unreliable performance of the robots, (when they worked they were fantastic) the 2015/16 plunge in milk prices and the problems, particularly here in the South East, of finding dairy engineers to service them.
This reluctance was due to local nervousness at the robot technology, misplaced fears of many night time callouts but, mostly, to pressure from the robots’ British manufacturers in reducing their agents at farmers’ expense. Whatever, it lead to us having to move to a new, to us, service firm more than 100 miles away whose charges – between £250 and £400 just to get an engineer on farm for routine services – were really quite painful. When we started with the robots, six years earlier, milk prices were on the up and things looked hopeful, until the world dairy ructions, with Chinese and Russian upheavals sending the world and UK prices through the floor.
The robots’ quite persistent unreliability, coupled with these high service charges, proved to be the decisive factors so, after much consideration, we came to the conclusion that a return to our previous, now completely updated herringbone, was the only rational alternative to quitting. It would save a lot of money on service costs and return the farm to viability. We would also trust that our milk prices improved – as they have, although they do need to hold firm now.
Yet as I said earlier, one does worry where the dairy staff of the future are coming from if the excellent East European workers lose interest in the UK. Not many Brits seem keen on the job.
