Dairy farmer more optimistic than a year ago

Dairy farmer John Smith milks his cows.

Essex dairy farmer John Smith said his family would be out of the industry by now had it not been for a major £1m investment it made in upgrading its milking facilities.

The contract the family has with Arla at just below 28p per litre is about at ‘break-even’ point but doesn’t allow for any more investment. However, things have eased up from the low point they reached about a year ago.

“We are a lot more positive than this time last year. We are in a better position than we were,” he says.

Then, the business was looking hard at how to cut costs, removing less productive cows and looking at borrowing to get it through the worst of the milk price crisis. Forage was a problem as it was a particularly dry year in his part of Essex - St Osyth, near Clacton - which meant buying more in to keep the cows productive.

Dairy farmer John Smith milks his cows.

Selling cows to other dairies has brought in welcome extra income, but worry about the future still plagues the industry, he says.

“No one knows, that’s the problem,” he explains. “We just want it sustained at this level now.”

He keeps around 260 cows and sends off around 14,000 litres of milk every two days. But each dairy farm has differences, and that means some are doing better than others.

“There’s such a variation of profit and loss. Some farmers can make a profit on 21p. Some are struggling to make a profit on 28p. I think dairy farmers have got to up their game a bit.”

Dairy farmer John Smith milks his cows.

John Torrance, East Anglia Dairy chairman for the National Farmers’ Union (NFU) said: “According to the latest DEFRA data, the average UK farmgate price reached over 26ppl in December 2016. This was a 0.68 pence per litre or 2.7% increase on the previous month.

“The increase is welcome given wider trends over the past few years, but the milk price is now only just level with what it costs us to produce.

“All of this means that we cannot make the profits we need to be able to invest in the future.

“On top of this, there is still a considerable difference in the price farmers receive for their milk. One thing people can do to support dairy in the east is to look for British with the Red Tractor symbol and ask restaurants where they get their milk, cheese and ice cream.”