Dairy has been hitting the headlines once again as inflation and the cost-of-living crisis continue to grip consumers. Supermarkets have been cutting back milk prices to lure customers in. However, as retailers are cutting prices, the milk price farmers are receiving is also falling heavily. Unfortunately, this is while farm production costs remain stubbornly high.
Industry figures in the 12 months to August 2022 show that for dairy farms feed, fuels and fertiliser saw inflation rates of 31%, 58% and 118%, respectively. Whilst energy costs have come off their peak since then, labour costs have increased to offset this.
In addition, the impact of the 2022 summer drought led to insufficient feedstuffs being produced to sustain the winter period. Dairy farms' production costs remain considerably high when added to the prolonged cold wintery weather felt through 2023.
As an Association, our inbox has been pinging with comment requests from the wider press on the issue. When commenting, we have been highlighting the extent of the problem and the importance of UK dairy farming in producing highly nutritious foods to some of the highest environmental standards throughout the world. We've also been raising awareness of the importance for farmers to receive a sustainable price for their produce to ensure that this production is not substituted for imported products with lower environmental and animal welfare credentials- something that is often lost.
It's likely, given market pressures, that it will be a bumpy road ahead. Let's hope processors, supermarkets and consumers can return a margin over the cost of production to ensure the dairy industry is sustainable in the longer term.
Dairy Labour Roundtable and Survey
In other news, we are less than two weeks away from hosting the Dairy Labour Roundtable at the House of Lords, which will discuss the labour challenges and solutions.
The Roundtable will include farmers, industry personnel, recruitment experts, teachers and government representatives, who will each have the opportunity to share their perceived barriers to recruitment in the sector and discuss ideas to overcome them.
The Labour Roundtable aims to map out how an improvement in the recruitment of UK dairy farmers can be achieved through a series of key actions, which will form part of a more extensive roadmap.
We have also launched a labour survey for dairy farmers to complete to ascertain the extent of recruitment problems, possible reasons and regional variations to feed into the Migration Advisory Committee (MAC) review of the Shortage Occupation List (SOL), which closes next month (26 May).
If enough evidence can be mounted to demonstrate the degree of the labour issues, then occupations such as herdsperson could be added to the list. This would give some dispensations within the immigration rules, designed to make it easier for employers to access migrant labour to fill vacancies in those areas of identified shortage.
The survey only takes 5 minutes to complete, and we urge as many responses as possible to make our evidence to the Government as accurate as possible. The survey can be completed at https://www.surveymonkey.co.uk/r/7KGDJH6
Keep posted in next month’s Milk Digest on the outcomes from the Labour Roundtable and also on our website at rabdf.co.uk