Tuesday, 19 May 2009

Countryfile, Cows and Bluetongue - Its What Consumers Think that Counts

BBC’s Countryfile programmes shown on the last two Sundays should be leaving livestock farmers with a deep sense of unease about farming’s reputation with the general public.

The programme about Holstein cows gave statistics that up to 40% of cows are lame and a big proportion suffer from mastitis, and said that these numbers are among the highest in the world. It also claimed, erroneously as it happens, that most cows never see a blade of grass in their lives. Although the indoor cows shown were clearly in good health, the average viewer would have taken away a message that dairy cow welfare standards are low. Those moving on to the RSPCA website were presented with the thought that inbreeding in Holsteins is worse than pedigree dogs, a topic which has commanded bad headlines of late. All in all, between Countryfile and the RSPCA there was enough to make consumers question, at least fleetingly, whether British dairy farmers deserve unqualified admiration.

The programme about bluetongue was a far less overt attack on farming standards. There were no words criticising a decision not to vaccinate. But by showing graphic footage of very sick animals with bluetongue in conjunction with an explanation that the costs were too high for most farmers, the implied message was clear – most English and Welsh farmers are too penny pinching to vaccinate and ensure their animals do not suffer.

Why the unease. Well, part of it is a personal belief on the part of many farmers that animal welfare practices should be exemplary.

Regardless of personal concerns, programmes about cows in pain from lameness or mastitis, and pictures of shaking sheep too ill to lift their heads because they are not vaccinated will shock consumers. They reinforce old stereotypes about uncaring farmers just at a time when the general public had come to view British farming in a much better light - to the extent that the big supermarkets are having to procure more and more British produce, because that’s what their shoppers want, and big companies like Dairy Crest are using Johnny Rotten to advertise that their Countrylife butter is British, upsetting the Kiwis in the process.

Its not just about reputation. Economics come into it too. If the public feels no empathy with British farming then the retailers are off the hook, and can buy wherever they want, probably cheaper. And farmgate prices drop further.

It’s ironic that the Countryfile/ RSPCA onslaught has come at a time when many dairy farmers are thinking of leaving the industry, with the result that milk may need to be imported. Not much of a threat if the public feels that British farmers have no better standards than the rest, and so won’t care where their daily pinta comes from.

Whilst the dairy industry went into defence overdrive regarding dairy cow welfare, academic and practical literature on the subjects reveal the sad facts that mastitis rates regularly reach 30% and often much higher, and lameness hovers around the 30% level.These figures might be better than they were but they are still grim. So far the broader press have not picked up either the dairy or the bluetongue issues, but it is only a matter of time. Indeed Hugh Fearnley Whittingstall is rumoured to be preparing a programmme on dairy cattle.

At the end of the day, the farming industry has to realise that an increased interest by consumers in where their food comes from comes with increased demand for the highest standards. Couple this with a vocal media, and access to detailed information about everything via the internet, and there is no place to hide sub standard performance.

Tuesday, 5 May 2009

Farmgate Milk Prices - the Elephant in the Milking Parlour

So once again farmgate milk prices have been cut, farmers are saying they cannot go on, protests have taken place about the unfairness of it all, and a Dairy Summit will be held in Scotland in three weeks time with representatives from across the supply chain seeing what can be done.

And there’s the rub. What can be done? Have we not been at this square before?

It’s interesting to read the various analyses about why prices are so low. Many blame the power of the retailers, most call for the supply chain to work together in a more sustainable fashion, some say the answer is better supply contracts, some have recognised that insufficient investment has been made in the industry generally.

The one thing no one speaks about, yet looms large like the proverbial elephant, is that there are too many dairy processors in the UK. This means that many are too small to work effectively in a market where good returns to shareholders, including farmer shareholders, depend increasingly on investment in low cost technology, added value brands, and a bit of clout when it comes to selling products into the market place. As the Oxford University Milk Chain Supply Project reported baldly last year - “The more processors there are the more options the supermarkets have and the lower the price the supermarkets negotiate.”

Which leads on to the seeming refusal of UK dairy cooperatives to recognise that individually they, and their farmer shareholders, face a difficult future. No one speaks about the drain on profits caused by having three cooperatives each turning over just £600m, yet each with big overheads. The cost of their 3 chairmen, 3 chief executives, 3 financial directors and 21 non executive directors alone is over £3million, according to company reports. Put the three businesses together and the huge savings generated could be invested in developing higher value brands, lower costs of production, and a more productive dialogue with major customers. The result would be better profits, which would translate into the improved returns that farmers are crying out for.
What is especially frustrating is that other cooperative companies have seen the issues, understood the benefits and overcome the obstacles. Friesland have just completed their merger with Campina, to build a company with a turnover of 9.5bn euros. In 2007 Sodiaal of France led the merger of 7 cooperative entities into 1, and has a turnover of 2bn euros. Why are UK cooperatives so blinkered that they cannot act too?

The odd thing is that the one area where farmers do have influence is through their coops. They own them for heaven’s sake. So the final question has to be - what is stopping the farmers themselves from putting pressure on their cooperative boards?