Dairy farmers have warned that they expect to close down their businesses since the prices they are getting paid for the milk they provide have decreased, even though some supermarkets are experiencing shortages. Freshways, the primary milk processor in the UK has stated that the cut of 2p-per-litre was very “unfortunate”, yet the trade drop with pubs and coffee shops is what forced this drop. Peter Pratt a Staffordshire farmer, stated that this came after losing 65% of his crops during a flood. The government has indicated that they are looking into this problem “as a matter of urgency”.
Bali Nijjar, the managing director of Freshways has said the payments to various farmers have also been deferred until 15 May, after an “excessive decline”. Michael Oakes, the dairy board chairman of the NFU (National Farmers’ Union), said that a few dairy farmers are “particularly vulnerable” when it comes to this “highly volatile situation”. Mr. Pratt a beef, arable, and dairy farmer that has 6 people employed in Rugeley, has stated that his family-run business has been particularly “hard hit”. Small milk pasteuriser.
25% of dairy farms in the UK have become “financially unviable” due to the decrease in milk prices and demands, the NFU has warned. The farmers that face this escalating crisis have called for “tailored” government support since the Covid-19 pandemic has led to the closure of many canteens, hotels, cafés, and restaurants.
Michael Oakes, the chair of the dairy board union, has said that we have around 25% of businesses that are no longer viable. He also states that some are on the brink of closure, and he asks “where is there any kind of support?”
The milk processors that typically cater to food-service markets have cut their orders and prices from many farmers, just before they reached the annual “spring peak in milk production”. This ultimately means that a large number of over 10,000 dairy farms in the UK are operating at significant losses. Mr, Oakes states that these were all viable companies before coronavirus. The representatives for farmers have held emergency discussions with the government.
Dairy farmers fall into several agriculture sectors that are already struggling. Vegetable and fruit farms are currently suffering due to labour shortages, while the demand for red meat has also decreased, hurting many livestock farmers.
George Eustice, an environment secretary has said that they have heard the concerns of the dairy farmers, which is the reason why they have further suspended the “competition rules” law. He further states that he urges farm companies to access loans made available through their banks, to provide support over this period.
However, some dairy farmers have stated that they are unable to access bank loans and lending or an existing support form from the government for the coronavirus-hit companies.
The milk co-operative Arla Foods UK has stated that it is experiencing dramatic increases in demands from consumers, where they have managed to raise the supply of milk to certain supermarkets in a significant way just by “simplifying the business”.
Ash Amirahmadi, the managing director, said he spoke with the government that is currently in the stages of “working very hard to put a framework together to allow for more co-operation”.
A spokesperson from Defra has said they are aware of requirements to change the direction of produce from hospitality markets to retail markets and are currently looking into this “as a matter of urgency”.