Dairy farmers are worried that they will soon be going out of business because of the reduced demand for milk. Note that, there is a noted shortage of milk in some supermarkets. Freshways is the main milk processer in the UK reported that the 2p per litre cut is unfortunate but the drop in trade with pubs and coffee shops has forced it.
Peter Pratt, a farmer in Staffordshire said the issue came up after he lost 65% of his crops during floods. The government reported that they are looking at the issue urgently. Note that, farmers will not receive their payments from Freshways until 15th May even after the excessive deadline. Michael Oakes, the chairman of the National Farmers’ Union dairy board, reported that some of the farmers are very vulnerable in the current highly volatile situation. Milk pasteuriser.
According to Mr. Pratt who is a beef and arable farmer with 6 employees in Rugeley, the family farm has suffered a hard hit. The NFU has warned that at least a quarter of the dairy farms in the UK have become financially unviable due to the reduced demand and prices for milk. All the farmers suffering the crisis are requesting tailored government support, especially after COVID-19 resulted in the closing down of cafes, restaurants and hotels.
Mr. Oakes, NFU chairman reported that currently, that least 25% of businesses are not viable. For instance, there are some that are almost dying and looking for any type of support. Milk processors that service the food-service market have been reducing their prices and orders from thousands of farmers even when they are at the spring peak of milk production.
As such most of the dairy farms in the UK are currently operating at a significant loss. Note that, before the coronavirus pandemic, these were viable businesses. However, there have been several talks between the government and farming representatives. There are several sectors in the agricultural industry that are suffering, besides dairy farmers. These include fruit and vegetable farms that are suffering a labour shortage and livestock farmers where the demand for red meat has reduced.
George Eustice, the environment secretary mentioned that they have listened to the cry from dairy farmers and they are currently suspending the competition rules law. Businesses have been urged to access loans available to them for the best support during this period. However, dairy farmers reported that they are having trouble accessing any type of support, especially for businesses that suffered a hit because of the coronavirus pandemic.
Arla Foods, a milk co-operative in the UK mentioned that they experienced a huge increase in demand from customers. They managed to increase milk supply to supermarkets by simplifying the business. The managing director mentioned that they spoke to the government and are working hard to come up with a framework to allow more cooperation. A spokesperson from Defra mentioned that they need to redirect products from hospitality to retail and it’s a matter of urgency.
