DAIRY – Dennis Gibb
THE collapse of Dairy Farmers of Britain (DFB) and the closure of its Blaydon dairy, which supported around 600 jobs, has slammed home the crisis affecting milk producers.
The number of farmers leaving the industry has been rising for years and more are ready to quit as the milk price continues to hit confidence, according to the latest survey of intentions carried out by DairyCo.
DFB went into receivership at the start of the month and receiver PricewaterhouseCoopers shut the co-operative’s dairies after failing to secure buyers for them.
That has caused widespread repercussions, according to Dennis Gibb, who is based at Eachwick Red House Farm, near Newcastle, and sits on the NFU’s regional dairy board.
"I would probably think all dairy farmers have been affected by DFB because it probably undermined the price of milk but that should be very temporary," he said.
"It wasn’t just DFB members’ milk that went to Blaydon. First Milk put quite a bit of milk in there."
Former DFB farmers in the region now have to pay more to have their milk picked up by alternative buyers because they are not on the main collection route. The problem is particularly pertinent in the North East because dairy farms are dotted in little clusters, rather than all being grouped geographically together.
Mr Gibb said: "That is going to increase haulage costs and will result in a lower milk price. It’s bound to happen when buyers are working out how much to pay.
"Transport is a very big issue. Unfortunately at the moment there are milk tankers passing each other. Different buyers go to the same area to pick up milk; First Milk and DFB did work together."
He said the NFU would try to persuade more buyers to work together to cut transport costs.
Shrinking margins are also being blamed making young people think twice before entering dairy farming.
"At the moment, the retailer takes the biggest margin, the processor gets a smaller margin, the farmer gets an even smaller margin – sometimes none at all," said Mr Gibb.
"We have just started milking three times a day in order to try to improve our margin, as we are under such pressure as the milk price is so low. We are running at a loss at the moment."
If prices continue at their present level, his business will be down by around £100,000 this year on last year. He hopes the third milking session will help recoup around £20,000.
This is all extra work for farmers who have already reduced labour to a bare minimum and have little energy as individuals to try to negotiate better contracts with buyers.
"Certainly, we’d need better milk contracts. None of our contracts has a price mentioned at all," said Mr Gibb.
"The big worry is trying to get dairy farmers to work together. Just me as an individual asking for a better contract, I haven’t got much chance."
He also supports the creation of a supermarket ombudsman to ensure a fair deal from the supply chain and says shoppers have their part to play too.
"We need to try to get the public to buy British dairy products – cheese, butter, yoghurts, particularly cheese – that’s something we need to improve because that will limit imports."