The pair have urged customers to boycott certain supermarkets, which they believe are not paying their suppliers a “fair price”.
While the amount paid to farmers has been driven down, the price of milk for consumers has steadily increased over the years. What has really rocketed has been the supermarkets’ cut.
“Why should we be the ones to suffer?” said Mr Howie, 55, of Morwick Farm, near Warkworth, Northumberland. “How can mineral water cost more in a supermarket than milk? It just beggars belief. I won’t be doing this in five years time, unless this milk pricing is sorted.”
He is already £82,000 out of pocket after his former purchaser went into administration earlier this year. He then opted to sell his milk through Arla, which collects 11,000 litres of milk every two days and takes it to Leeds, where it produces “Cravendale” milk, cottage cheese, cream and flavoured milks.
When he started with Arla earlier this year, Mr Howie received 29p a litre, but this was cut to 27p at the start of June. Next month, it will be 25p.
As this income falls, the farm’s costs – for rent, diesel, electricity and feed – are rising, none more so than feed. Mr Howie said that a tonne of soya protein given to the cows now costs £345, around £100 more than last year, driven up by global demand.
He keeps costs down by relying on unpaid family labour. His 82-year-old father, David, who once ran the farm, still helps with the morning milking. His wife Angie, 53, and Andrew, 46, also work with him.
The farm also grows arable crops – rape seed, winter wheat and winter barley – the proceeds of which allow it to break even, for now.
As a business, the farm employs up to six people. If it went arable-only it would need just two.
The Howies have just over 200 cows, an average-sized herd, and their 30p-a-litre production costs are typical for the industry, according to the Royal Association of British Dairy Farmers.
Nick Everington, its chief executive, said: “Farmers are looking at these prices and saying that the numbers just don’t stack up and they are getting out.”
Although the reductions in price have been imposed by purchasers – the others, apart from Arla, are Wiseman, Dairy Crest and First Milk – Mr Everington said the “real villains” were the supermarkets they supply.
According to the Association’s figures, in 1996 retailers made 2.6p profit per litre of milk. Now the figure is 15p.
Over same period, the retail price has gone from 44p per litre (25p a pint) to 52p (30p a pint), while the number of dairy farms has fallen from 34,570 to 14,500.
“We have a major problem in the supply chain,” Mr Everington added. “The power of the supermarkets means that the processors are fighting for supply of the liquid milk market. They are being squeezed by the retailers, who are making massive margins.”
The supermarkets are not equally culpable, Mr Everington said.
Tesco, Marks and Spencer, Sainbury’s and Waitrose have “aligned contracts” with their farmers which guarantee them 30p a litre, just meeting production costs.
These contracts only cover around eight per cent of dairy farms – but they are fairer, Mr Everington said, than the deal offered by other supermarkets. He singled out Wm Morrison, Asda and the Co-Operative Group - the three retailers that Bryson and Meaden are urging customers not to buy their milk from.
“Their greediness, in their gross margins, is responsible for driving out dairy farmers and the effect that will have on the rural economy,” Mr Everington said.
“We’re not being greedy here. We are talking about allowing farmers to cover their costs – not about making profits. We just want a fair share of the cake.”
The price cuts come on top of other woes for dairy farmers - environmental legislation which is forcing them to pay to upgrade slurry stores; the ongoing threat of bovine tuberculosis, which has led to a wrangle over whether to cull the badgers blamed for the spread of the disease; and heavy rain which has forced herds indoors, adding to feed costs.
As farmers go out of business, the UK will have to increase dairy imports, Mr Everington warned. Last year, the UK exported £1.25 billion of dairy products and imported £2.6 billion.
Milk processors say the main factors for the latest price cuts are a global slump in commodity prices for skimmed milk powder, butter and cream, driven by an increase in global supply, coupled with a fall in demand.
A spokesman for Arla said: “When the prices are down, we are not able to pay the returns to the farmers, because we are not receiving them. We appreciate it is very difficult for our farmers at the moment, and we are doing all we can to improve our returns for them.”
The supermarkets also say they are doing what they can.
The Co-operative Group said it was planning to increase the premium it paid to farmers. A spokesman for Wm Morrison said: “We are looking at it to see whether there are other models that we can use that better support farmers.”
Asda said it would “continue to meet with our farmers and their representatives over the coming days and weeks as we seek to resolve the current difficulties they face.”
For Mr Howie, improvements must come soon. His family have farmed dairy cows in the area since 1926 and have been tenants at their current farm since 1945. The tenancy agreement leaves the way open for the farm to be passed on to the next generation.
Mr Howie has three sons, two of whom have already entered the agriculture business – the third is still at school – but Mr Howie is doubtful they will take on the dairy herd.
“You need something to make it worth getting up in the morning to milk cows and at the moment we don’t have that,” he said.
Source: www.telegraph.co.uk
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