This month I joined part of a small delegation of farming trade bodies to meet Defra Minister, Daniel Zeichner and Baroness Hayman, to discuss the welfare of farmed animals. From a dairy perspective the UK Dairy Cattle Welfare Strategy, launched in 2023, has cross industry support – from UK Chief Vets to the supply chain. One reason for the widespread endorsement is the recognition that having a strategy not only improves welfare for the animal, but has huge trading benefits.
The aim of that strategy is to strive for the highest levels of welfare in dairy herds, in order for us to remain world leaders. We are already renowned for our high standards, which is the bedrock of a UK dairy export market worth over £2 billion.
On the flipside, this success and reputation presents a huge financial risk in the event of a notifiable disease outbreak, and is one of the key priorities for the dairy sector to work with government on. Keeping such diseases out, with robust surveillance and border biosecurity measures, as well as maintaining effective strategies and investments for managing endemic diseases must be top of our priority list. It was the first meeting in, what I hope will become, a more frequent, outcome focused dialogue between industry and government on health and welfare.
I was also very honoured to be invited along to this year’s City Food Lecture. Keynote speaker was horticulturalist and industry leader, John Shropshire. John is Chairman of the G’s Fresh group of companies based in the UK, Europe and the USA; focused on the production of a range of salad and vegetable crops.
Having spent several years working in the fresh produce industry between my dairy sector roles, I’m probably more familiar with the ins and outs of the vegetable world than most readers of this newsletter. Yet, even I had pause for thought when Mr. Shropshire declared contract pricing one of the biggest hinderances of the competitiveness and profitability potential of the fresh produce sector.
When I left the dairy sector to work in horticulture, I was amazed at growers’ adamance that any price or market related lobbying was strictly off the table for their representatives. Growers dealt with that directly. It was streets apart from my main function as a policy adviser on milk – where (back then) I seemed to spend most of my time condemning processors or retailers for not paying a fair price, offering fair contracts or having any form of long term commitment in place with their dairy suppliers.
Growers, over time, (and after some waring down), did come to see that representation on abuse of retail power in the hort sector was an issue that required exposure and solution. Some of those solutions – such as the principles of fair contract terms – I introduced directly from the dairy sector into produce. We made great strides there, so much so that the state of the fresh produce supply chain was among the first dossiers to cross the Grocery Supply Code of Practice adjudicator’s desk, and as a result, several retailers began extending the relationships they had initiated in their dairy pools into other sectors of their supply base.
Whilst contract pricing in the dairy sector is - largely - accepted as being a positive step forward to increased transparency, reduced volatility, and a guaranteed margin over costs, it seems in other sectors it’s regarded as a price suppressant. Some growers would rather experience the full buffeting of market peaks and troughs than operate with a margin over costs basis. It’s not quite ‘high risk, high reward’ in such a low margin sector, but it’s greater control for the grower.
The key difference potentially is the agility that growers have over, say, dairy farmers.
Dairy farming is a long term business and farmers can’t easily switch from one thing to another. Once you’re committed to milking cows, that’s kinda what you do every day, until you don’t.
Whereas, some growers in the field vegetable sector can, for example, (and not without significant effort and impact of course), flex their production in line with market prices, retail behaviours and supply and demand. Push a grower too hard and they can choose to grow other things, or move some production from produce to cereals. I know one Lincolnshire grower who once sold all their broccoli on the Dutch market and told his retail customer to go buy it there at twice the price he was being offered! That’s not the case for everyone of course, but you get the idea.
It was an interesting perspective and debate at least, which highlights the differing nature of agricultural supply chains. It has prompted me to start thinking about the current state of dairy supply chains, and to ask if we’re happy with the way that they have evolved, and where there might be further room for improvement. Thoughts on a postcard please.
The government’s land use planning framework consultation was another prominent point of debate at the lecture. Government claims it will reset the current approach and seek to balance competing demands on land for housing, energy, nature and food. In doing so it will help farm businesses maximise the potential of multiple uses of land, support long-term food production capacity and unlock opportunities for businesses to drive private finance into the sector. Watch this space, quite literally it seems.
And what of SFI closing for new applications? The pot has been allocated and applications are apparently at the limit. With some farmers now left on the wrong side of the application window, I suspect many more will pull their finger out and get on board the bus a bit quicker when the next round opens.
Closer to home, RABDF’s Council is meeting this week to begin work on developing its new business strategy, with some inspiring sessions ahead to help us set our vision for the organisation for the coming years. It’s an exciting time to be part of the charity as it reboots itself to become, once again, a powerful representative voice in the dairy industry.
I’m always keen to engage with our readers and hear what you think so please get in touch.
Hayley Campbell-Gibbons