The cash we earn from promoting our milk does not cowl our prices | EUROtoday

When Adam and Lucy Johnstone took over a dairy farm within the south-west of Scotland two years in the past, they have been in a position to make a cushty revenue from the milk produced from their herd of 60 cows.

But during the last three months the value they obtain for every litre of milk from dairy big Arla has tumbled by 25% – beneath the price of manufacturing.

They are actually contemplating promoting their milk direct to native prospects in close by Moffat or leaving farming all collectively.

It’s a difficulty which is affecting dairy farmers throughout Scotland. The National Farmers Union for Scotland (NFUS) mentioned the sector is used to fluctuating costs however the current downturn is “unprecedented” in each velocity and scale.

Arla blames the value hunch on an oversupply of milk globally. Meanwhile demand for milk and dairy merchandise like cheese and yoghurts stays flat.

The Johnstones say it prices them 38.5p to supply a litre of milk however they’re at the moment receiving 35.7p a litre from Arla.

It implies that in the event that they produced 35,000 litres a month, they might be paid £12,495 – about £1,000 lower than it prices them to take care of their herd.

Lucy mentioned that though farmers are resilient, the pressures they’re going through are unsustainable.

”As an business we turn out to be accustomed to creating a loss, and that is meant to be OK as a result of at different instances of the 12 months we make a bit bit more cash,” she added.

”I find it tough that we’re meant to be OK with not covering what it costs us to produce food that we’re feeding the nation with.”

The couple are now exploring the option of selling milk direct to customers in addition to their current contract with Arla.

They said the support shown by local residents, hoteliers and businesses reminds them that there is an appreciation for the country’s farmers, but that the ongoing stress has left them contemplating leaving the industry.

Adam said: ”It’s soul-destroying to be honest. There are a lot of benefits that come from farming that aren’t financial- we have a great way of life and get to spend a lot of time with the kids.

”But the financial pressures are there day-in, day-out and don’t go away when you go to sleep. We’ve had multiple conversations about getting out of farming.”

For the first time, UK milk production is expected to exceed 13 billion litres this year.

Meanwhile prices for mild cheddar, butter and skimmed milk powder are all approaching their lowest levels for five years, according to NFUS.

Large dairy processors like Arla, Muller and First Milk have been cutting the price paid to farmers for their milk for a number of months, in what they say is in response to the global markets.

They are facing pressures of collecting, processing and selling an excess of milk which is outstripping consumer demand.

A spokesperson for Arla said: ”Global milk production has increased so there is significantly more milk around the world. This is therefore impacting negatively on the global commodity markets, resulting in lower prices.

“As a cooperative owned by the identical farmers who provide our milk, Arla’s earnings go instantly again to our farmers as fee for his or her milk and to help the way forward for dairy manufacturing.”

Muller confirmed their ”daily milk collection volumes are still much higher than this time last year”.

First Milk communications director Mike Hindle said the challenges of the dairy industry were complex.

”We make a lot of cheese and some of that is exported,” he added.

“There has been a change in trade flows within the global cheese market with more cheese coming from the US and New Zealand into the UK and Europe.

”They are producing at lower prices for various reasons and so there is a loss of value within those markets as well.”

NFUS is now calling for belief, transparency, and equity all through the provision chain.

Committee chairman Bruce Mackie mentioned: ”Processors should talk clearly and pretty with suppliers. Farmers deserve transparency and belief throughout such a vital time.”

The dairy industry has attracted some significant investment recently, like Arla’s £144m upgrade to their processing plant in Lockerbie.

Vice-president of NFUS, Robert Neill, said that shows a long-term commitment to the industry, but that more help is needed urgently to stabilise the situation.

“This is about greater than milk – it is about rural jobs, native meals safety, and the way forward for our communities,” he added.

“The provide chain should share the danger, not simply the reward.”

Meanwhile, the Johnstones say they are in “survival mode”.

Adam is a former marine and is an amputee. He wears a prosthetic leg and with regular flare-ups, his doctors advise resting when he is in pain.

However, Lucy said the financial pressure means that Adam is working through the pain, and it is now affecting family life.

“We have two younger youngsters that he desires to run round with and on the minute he is giving his all to that farm,” she mentioned.

“It’s to not give us a very good wage, it is to maintain us afloat, it is survival mode and it is not honest on him.”