Dairy - is the tide turning?

Dairy advert mix_600_314

Ruth Mason

She writes:

We're all aware that over the past 18 months the dairy industry has come under significant pressure. In recent weeks, this has captured the interest of the British public and has taken the headlines by storm. 
 

More of our staff blogs...

Fay Jones small Governemnt affairs adviser_275_447Fay Jones is the NFU's EU communications adviser - 4,000 farmers take to the streets of Brussels

Jonathan Scurlock_275_258Dr Jonathan Scurlock is the NFU's chief renewable energy and climate change adviserBattery tech key to the future of renewables

Chris Hartfield_275_413NFU pollinator expert Chris HartfieldA grown-up debate on neonicotinoids

lucy smith, legal adviser, nfu staff_170_254Lucy Smith, NFU legal adviser - Will the Modern Slavery Act impact on your business? Members only

SSam Durham_170_255am Durham, NFU chief land management adviser - Your chance to test farm innovation ideas

Rob Harrison Head and Shoulders_170_171Dairy board chairman Rob Harrison - The future of dairy: What next?

Phil Bicknell interview_200_222NFU head of food and farming Phil Bicknell - Milk prices and family farms; the big issues behind the headlines

Phil Bicknell, chief economist_182_275NFU head of food and farming Phil Bicknell - Prices, policy and promoting British

 

Read more NFUblogs...

We've seen many retailers and others in the supply chain take some of these concerns on board and make significant changes within their supply chains to support British dairy farmers. But what is the significance of these moves?

Following concerns from shoppers, Asda, Aldi, Lidl and Morrisons have all put in place floor prices for their liquid milk supply - these mechanisms vary in terms of their price and the time scale they will run for.

While these measures do not go as far as gold standard cost of production models, developed by The Co-operative, M&S, Tesco, Sainsbury’s and Waitrose – they do offer much needed financial input back to the diary sector. 

These models also show that Asda, Aldi, Lidl and Morrisons have been prepared to take some accountability of their supply chains and the litres of milk that they purchase.

This is a significant move for those who have not historically taken this responsibility – particularly the discounters who do not have precedence for having direct interaction with farming issues. 

We have seen this need to support sustainable supply chains extended into the cheese sector, from both Tesco and Morrisons who have developed mechanisms for paying a sustainable price for cheese from major British suppliers – to aid farmers through the winter.

This shows that the supply chain has recognised that issues within the diary sector at not limited to those producing for liquid milk markets. 

Processed dairy products are an important area, which the supply chain needs to continue to find ways to address. This comment does not only apply to the retail market, but changes need to be seen from food service and branded products. 

We've recently spoken with the top three coffee chains in the UK, and Costa (the largest with over 1,700 stores) has been able to outline to us that it has already implemented a sustainable way of buying milk which works directly with dairy farmers. 

While these changes are unlikely to lead to a rapid upturn in milk prices, they are substantial moves in the right direction which have seen retailers and food service companies taking responsibility for helping farmers to build a sustainable future and to help ensure that British dairy products are on the shelves for consumers in the years ahead.