Dairy farming in crisis

Last week, The National Farmers Union said that the UK Dairy Industry is in crisis, with 2000 dairy farmers suffering severe financial pressure, and that the numbers are growing on a daily basis. Supply chain issues caused by the coronavirus pandemic have meant that dairy farmers have been throwing away litres of fresh milk.

It is understood that the Government are looking at the idea of a hardship fund to help struggling dairy farmers. Mike Bracegirdle, who heads up the Butcher & Barlow Agriculture department, considers the need for such a scheme.

Cheshire is a traditional stronghold for the dairy industry.  With the change to the New Zealand scheme and grass finally growing many farmers are seeing their production increasing. The problem is that demand and prices are falling. This is in part due to the pandemic as demand for dairy products in the hospitality sector has dropped due to restaurant and café closures.

The Department of Environment Food and Rural Affairs has said it has relaxed competition law to assist the industry, amid scenes of millions of gallons of fresh milk being poured away down the farmers drains. County Milk Products estimate that 20 million litres of liquid milk normally go into the food production, but there is only a market for 20% of it currently.

Cashflow becomes an issue. NFU dairy board chairman Michael Oakes says the crisis had ‘very rapid consequences’ in terms of cashflow and estimates that ‘at least a quarter of the dairy industry have been, or could very soon be, affected adversely by this extreme market disruption’.

DEFRA has said that farmers can access the financial support schemes already in place such as the Self-Employed Income Support Scheme or the Bounce Back Loans which have been put in place but farmers are finding these hard to access.  Business rate holidays do not apply and farms cannot furlough staff or stop milking cows. George Eustice, DEFRA secretary, has ruled out a support package for the dairy industry similar  to the fishing sector, arguing that the current situation is a temporary dislocation in the market affecting a minority of farmers’.

The majority of farmers supply milk under contracts but have seen price per litre fall, in some cases below that which it is viable to continue production.

There is an acceptance that there are farmers with no milk market and that they need immediate support but Conservative MP Sir Geoffrey Clifton –Brown has suggested a time limited payment could cost between £10 and £20m. 

The NFU will continue to lobby the Government for the support the industry so desperately needs.

 

If your farm is one of those affected by the current crisis, Butcher & Barlow can assist.  We can work with you to assist you in re-negotiating loan payments, mitigating your outgoings, advice of employment issues and assist in claiming under the financial schemes available. Contact Mike on 07768 512 997 for an initial no obligation discussion on your business requirements.