Adam Henson's farm talk: UK dairy farming

As a nation we Brits love our milk. Generations of children enjoyed free bottles of the stuff at school; the doorstep delivery is a national symbol of our morning routine and even Prime Minister David Cameron’s Desert Island Discs included Ernie (The Fastest Milkman in the West).

But despite being familiar and comforting, none of these things bear any relation to the modern state of the dairy business. The industry is in trouble and it’s been going that way for the last decade. The biggest problem is that, for most farmers, it costs more to produce milk than they earn from selling it. A recent industry report put the price of producing your daily pinta at around 14p, but the average price paid to farmers was more like 12p.

So why can’t famers just demand a better price for their milk? Well, it’s not that simple. Milk processors and supermarkets want the best deal for themselves and for the shoppers. Stores want to keep the price of basic staple goods such as milk, butter and bread as low as possible to attract customers. Nearly everyone uses supermarkets, and once large volumes of people are in the aisles, the store will make its big profits on the luxury items that few of us can resist.

Helping hand

I’ve often wondered why supermarkets don’t offer the farmers a helping hand by just putting an extra 5p on the price of a container of milk and give it directly to the supplier. However, I understand that the mechanics of modern consumerism don’t work like that. The millions of people who shop on a budget would just take their money elsewhere. It also explains why the cheery milkman rattling the gold top on his morning round is fast becoming an endangered species. But it means the squeeze is on the producer and the price is forced on the dairy farmer.

Sadly, it doesn’t look like things are going to improve in the near future. This year, Defra predicts that dairy farm incomes will drop by nearly 30 percent. So it’s no surprise to learn that farmers are deserting in droves – about 450 dairy farmers leave the industry for good every year.

For those who carry on, the way they farm is changing fast. What might once have been called industrial farming, with the animals brought inside throughout the year, is now reasonably commonplace across the UK. Meanwhile, herds are getting larger, investment in big sheds, new cubicles and the latest milking parlours can be offset by increasing the number of cows and improving the output.

It’s a numbers game, and economies of scale go some way to justifying the cost of production. We can get too sentimental over the idea of the traditional farmer with his small herd grazing in the meadow. Big doesn’t always mean bad. Large-scale dairy units have got more resources, better equipment and dedicated managers.

Last year, I visited mega-dairies in America for a special Countryfile report. The cows I saw there were looked after immaculately and any fears about animal welfare were immediately dispelled. I can honestly say that they were kept in better conditions than one or two farms I’ve seen in Britain, where the farmer struggles to milk 80 cows on borrowed money and a tenancy. Of course, the vast majority of tenant farmers here are excellent herdsmen and women, so it’s worth saying that small isn’t necessarily bad either.

Unique offerings

The key is viability, and if those small dairy farms want to survive, I think they have to play a different game to the big boys. Their future is in niche markets such as specialist milk, farmhouse cheese, ice cream, yoghurt and even butter. There are other advantages too, such as creating their own bottling plants or deliveries to the door.

People such as Jess Vaughan, who has a small organic milking herd near Gloucester, are doing just this (see April issue, page 60). So is Dani Slatter, who runs a Fair Trade ice-cream business in the Cotswolds. Both have realised the appeal of something small and local in an increasingly globalised world.

Meanwhile, I’ve recently heard about a new initiative called the Dairy 2020 Project, which is working to get farmers, processors, supermarkets and others round the table to find some common ground. With eight billion pints of milk sold in Britain every year, we should be more optimistic about the future of the industry. And I’ll drink to that.