DAIRY farmers should consider evaluating their businesses and assessing the vulnerability of their supply chains after disruptions caused by coronavirus highlights the fragility of the sector.
In the Royal Association of British Dairy Farmers (RABDF) podcast, ‘The Milk Digest’, which discussed farmers taking back control of their milk price, RABDF Vice Chairman Robert Craig said farmers needed to better understand their milk buyer.
He said: “Understanding your milk buyer and how exposed they are to a particular market is important. Farmers need to look at their business and their own set of skills and ask themselves whether they could cope with a big milk price drop if their primary purchaser was to lose their market.
“Farmers need to evaluate their options and think whether there is anywhere else they can send their milk to that would better suit their skills and their business. It’s about farmers really understanding their own skills and the vulnerability and exposure of their milk buyer,” he added.
Mr Craig, who farms across three sites in Cumbria and Northumberland and is a Director of First Milk, said the cooperative model had weathered the coronavirus storm better than many largely due to the marketing of milk in different areas.
He said: “The business model at First Milk is working well with a domestic and export focus. Essentially the cooperative is marketing the milk for us.
“Close to 50 per cent of milk in the UK is now sold through a dairy cooperative. If you look around the world all major milk-producing countries market their milk from a cooperative base,” he said.
RABDF chairman Peter Alvis said for farmers to take back control of their milk price better communication was needed throughout the supply chain.
He said: “There needs to be more cooperation between the farmer and processor to manage the volume of milk coming forward.
“There is not a lot of joined up thinking in the marketplace and we need a milk programme in front of us.
“Information travelling through the markets will allow us to know the implication of putting another 1,000-cow dairy up, for example. We cannot just keep adding cows and producing more milk and expecting to maintain value,” he warned.