‘We can’t give up’ - east dairy farmers plunged into crisis

Dairy farmer John Smith's calf.

Dairy farmer John Smith's calf. - Credit: Su Anderson

The plight of dairy farmers has been highlighted nationally by a series of protests and crunch meetings between farmers’ leaders and retailers over plummeting milk prices. But what does it mean to the small dairy farming sector in East Anglia? SARAH CHAMBERS spoke to some of our dwindling number of dairy farmers.

Dairy farmer John Smith's calf.

Dairy farmer John Smith's calf. - Credit: Su Anderson

We are just scratching our heads because we can’t give up,” says Essex dairy farmer John Smith, who has just invested in a new dairy unit.

“We have borrowed this money - we have got to pay it back.”

John, of Smith Farms, St Osyth, near Clacton, is one of just a handful of dairy farmers still hanging on in East Anglia.

But crisis is gripping the dairy industry, with farmers’ leaders warning that nationally, as milk prices plummet to new lows in the face of a global over-supply, some farmers will be forced out of business. They have been holding crisis meetings with retailers, but it remains to be seen whether the measures proposed, including the launch of a new premium milk brand by Morrisons, and Asda’s announcement that it will pay a guaranteed price of 28p a litre from Monday, will stave off impending catastrophe.

Dairy farmer John Smith's calf.

Dairy farmer John Smith's calf. - Credit: Su Anderson

Across Essex and Suffolk, where the golden age of mixed livestock and arable farms in every village is just a memory, the farmers that remain have invested heavily in the future. In 2013, there were 27 dairy herds listed in Suffolk and 12 in Essex - a 52% and 71% fall from 2005 - and it’s thought these numbers are some way lower now.

Some, like the Smiths, have built modern dairy units, built up herds, or diversified into milk processing in order to insulate themselves from the volatility of liquid milk prices and give themselves some financial stability.

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At the moment, with harvest in full flow, this largely arable region can’t afford to lose its farming workforce to protests like the ones seen recently in the west of the country, where many of the UK’s dairy farms are concentrated.

But a few years ago, John organised a milk price protest when around 150 farmers gathered at Hatfield Peverel to highlight the plight of the dairy sector. That crisis didn’t last as long, he says. He sees this one extending into next year, and is fearful for the future.

“Everyone’s at crunch point now, and no one can see the light at the end of the tunnel,” he says.

John works alongside his father, Philip. Last year the family invested in a new £1million milking unit for their 220 milking cows. They needed to invest to survive in what’s become a highly competitive industry. They have two employees in the dairy and could do with another, but his mother, Christine, is mucking in to fill the gap.

“Last year we took the plunge and invested in a new dairy unit. We moved in in November. That’s when it (the milk price) started crashing,” explains John.

“We are 90% finished and we had to stop because we just can’t afford to invest in anything at the moment.”

The current crisis is disheartening because the cows are doing so well in the new unit, he says.

“In our old unit, our cost of production was much higher, and we couldn’t sustain it,” he says. “The cows are a lot more comfortable. They are producing more milk. Everything has gone so well with it.”

John is convinced that many consumers aren’t bothered by the price of milk and would be prepared to pay more for it, so he is perplexed by the low prices offered in supermarkets.

“I would say 80% of people don’t care, they just want their milk. We are not asking for pounds, we are asking for pence.”

When the Smiths were working out costings for the new unit, they looked at three prices for milk - 28p a litre, which was break even, 30p, and 32p. Right now, John, who supplies farmer-owned dairy co-op Arla, says he is currently getting 23p - well short of what he needs to cover his costs.

“We just want the support. We know there’s a global flood of milk, but it’s sickening to see these supermarkets cutting the price of milk,” he says.

Farmers feel that supermarkets are undervaluing their product, and they’ve had enough, he says.

“They are just trying to cut their prices all the time, and I think that’s why farmers are fed up.”

At the moment, John doesn’t know what the future holds for his business.

“It’s just the volume of milk that’s keeping us going and we are just not spending money, other than feeding the cows.”