Dairy farmer counts cost as extreme weather puts £60k-sized hole in his finances
- Credit: Nick Butcher
Dire weather has cost a Suffolk dairy farmer £60k – and he’s just one casualty among many nationwide in what has been a tough year for the industry.
Jonny Crickmore, of Fen Farm Dairy, Bungay, said it wasn't until months later that he realised the full extent of the financial hole left by extreme weather events last year.
According to a survey by rural accountants Old Mill, dairy profits halved in 2019, after farmers saw their earnings drop sharply during 2018/19 as the long, hot summer of June and July last year crowned a series of weather extremes.
MORE - Brexit blamed as plug pulled on 'last remaining' dairy factory in East AngliaIt found that farm profits fell from 5.9p a litre (£383 per cow) to 2.69p a litre (£141 a cow) in the year to March 31, 2019.
Old Mill said this was "mainly attributable" to the very dry summer, which hampered milk production and meant producers had to buy in extra feed, pushing up costs of production from £2,186/cow to £2,411/cow.
"We think the drought cost us about £60k last year, without a doubt," said Jonny, who launched what has become a highly successful cheese-making enterprise - Baron Bigod - 10 years ago in response to the terrible straits the industry found itself in then, with plummeting milk prices and rising costs.
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The weather last year was "horrendous", he said, starting with a snowy period in March, followed by flooding, then no rain at all for two months.
"It was bad, and this year has not been amazing," he said. The flooding made the grass sick, and a glorious spell of weather meant it recovered, only to become parched. Being based on a flood plain in the Waveney Valley hadn't helped the situation, he added.
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"You don't see it until 12 months later because the food you are creating, you are drilling that and harvesting that," he said.
"We always have a clamp full of maize for when we have a bad year, and we emptied that and then had to buy in more food."
When spring came around this year, he had to plant out more seed on more fields to make up for the feed which had been lost last year, which added yet more cost to the original £60k.
One of the "crazy" aspects is that in his entire lifetime, he had hardly seen the price of milk go up at all, while costs had increased significantly, he said.
"Food is as cheap as it's ever been and really I was listening to a person talking at a conference, and 40% of our food we waste, or something like that," he said. "We always blame supermarkets but actually supermarkets aren't the main problem - it's us. As people we don't eat all that we buy. It should be more expensive really and then people would think about what they throw away."
The cost of his production had gone up because of the weather extremes, he said.
"Farming relies on weather, which is something we can't change," he said.
Even within a few miles, each farmer's experience could be radically different, as weather could be very localised, he added. "It will all depend on your farm and the day you get your crops drilled. Some can beat the weather because of the location - it will vary from farm to farm."
Profits just go into reinvestment and farmers won't see it, he said. "It disappears into machinery and buildings and repairs so there isn't any margin in it," he said.
Ten years ago, he became fed up with "constantly having this battle of living on the edge", he said.
This prompted him to diversify, and he was pleased he had - he now makes butter too, among other things.
Had he not diversified "we would hang on in there and make it work but it's always a constant struggle. You get a good year or two and get a chance to reinvest", but then the downturn comes, he said.
"Farmers are a weird breed, in that we happily work 80 or 90 hours a week," he said.
Businesses were family-run which meant often farmers were willing to work for below the minimum wage. "Farmers just slave on and carry on - they'll work Sunday evenings when no one else would," he said. "It's more than a job - it's life. It's their house, it's their home, it's where they live. It's more than just renting out a shop in Norwich. It's much more personal when you're in farming."
Andrew Vickery, head of rural services at Old Mill, who unveiled the report at the Dairy Show on October 2, said higher milk prices partially offset a drop in milk production, bringing milk income to £2,267/cow, compared to £2,272 in the previous year. But that still left the average farm making a marginal profit only after accounting for non-milk income like calf and cull cow sales.
Dairy farmers were now having to deal with the uncertainty caused by Brexit, he added.
"Although the weakening value of sterling will prop up milk prices to some extent, its impact on imported inputs is only partly being offset by lower domestic grain prices from the good 2019 UK harvest."