Earlier this week videos circulated on social media showing farmers opening the taps on bulk tanks to pour gallons of fresh milk away. With supermarket shelves running low on milk just days previously, the posts have understandably been met with public horror – both for livelihoods of the producing farmers and seemingly inexpicable food waste. So as panic buying strips shops of milk, Anna Bowen asks why are farmers facing no option but to dump the fruits of their hard labour.
First, it helps to understand how the dairy supply chain works: Unless farmers have facilities on site to bottle and distribute their own milk, the milk produced on the farm must be sold to an external buyer. A few of these are owned by the producing farmers, but the majority are privately owned.
Farmers and their buyers have contracts, usually with a long notice period (sometimes a year) which means that switching buyer is inevitably a slow process. Different buyers will have different end markets; some turn the milk into cheese, butter or yoghurt, some supply liquid milk for the retail sector, and some are linked to supermarkets who sell bottled milk picked up with your weekly shop. Other buyers may have multiple product ranges; for example liquid milk, yoghurt, and cheese.
When buyers have surplus milk they offer it for sale on what is known as ‘the spot market’, where it can be purchased by other companies. When milk volumes are low and demand is high, the spot price increases and when milk volumes are high and demand is low the spot price decreases.
The current COVID-19 pandemic has served as a perfect storm to expose all of the weaknesses in this current supply chain. Milk buyers who sell into food service, ie. cafes, restaurants and fast food chains have seen their market dry up overnight.
Spring already sees an increase in milk production; block calving herds who calved their cows in February and March reach peak production, and all year round calving herds often see an uplift in milk as their cows are turned out onto spring grass. This means that there is a lot of milk around, and the spot milk price dropped at the end of last week to 15pence per litre. Milk price is already generally at an abysmal low, but now, the price the farmers will receive is lower than the ‘usual’ already shamefully low price, for the farmers working tirelessly year round to supply the relentless demands of the nation.
When people started socially distancing there was panic buying of milk, which increased demand in supermarkets. Now, in the second week of lockdown, demand has decreased as consumers use up the milk they panic bought, take fewer trips to shops, and are met with item purchasing limits. This means that there isn’t the demand to buy the milk floating on the spot market, which keeps that price so low. Also, the driers that turn milk into powder for manufacturing are running at maximum capacity.
These factors have combined to result in a situation where farmers across the country have been told that the price they receive for their milk is dropping rapidly, or that the buyer cannot forward-predict a price due to the uncertainty of the current market.
Most of the farmers photographed pouring milk away sell their milk to a buyer whose main customer is high-street cafés. When they closed, that milk was no longer needed – and as we have seen, the spot price is incredibly low. The buyer then announced a cut in the price paid to farmers, and a freeze on payments, which will have a massive impact on cashflow for those farm businesses, and for the companies and individuals that they work with.
Farmers were then told that their milk would not be collected due to issues with their factories, described in an email to suppliers as ‘ongoing restrictions which are leading to more stringent handling procedures, staff shortages, slower production etc’ resulting in milk needing to be tipped away onto fields or into slurry pits.
Jules, aka @girlinthedairy on Instagram, working on her family’s dairy farm in Surrey posted two harrowing images earlier this week (pictured above) with the caption, “Very sad say, 18,000L [of milk] down the drain. Dairy haven’t collected our milk for two days as they have nowhere for it to go. We supply milk for cafés, restaurants and schools. They don’t have a demand for our milk, therefore it’s not being collected…. if only there was a way to tell the girls to turn off the milk for a couple of weeks. #teamdairy #wearestillfarming #backbritishfarming.”
With approximately 1.8 million dairy cows in the UK producing milk 24/7, millions of litres of milk are expected to be dumped before lockdown is over, with over 1.5 million litres thought to have already been tipped away last Sunday. The reality for these farmers and their cows, isn’t just as simple as stopping milking. Suddenly stopping milking cows can have devastating and potentially fatal health impacts on a dairy cow. In order to keep their ‘girls’ happy and healthy, the fact is that they need to be milked daily.
As the pandemic situation is changing daily, and people settle into working from home – and gain a better understanding of their own financial situations – purchasing habits will change. The demand for dairy will change, and may even be very different by the time that you read this article. AHDB Dairy produces a weekly market report which details the most recent news in terms of milk sales and processing, their website is a good resource for current data and accurate information. Much of the market information in this article has been sourced from their articles.
So what can you as a consumer do to help? The important thing is to continue to buy dairy products: liquid milk, yoghurt, cheese, butter, and products containing milk. While it may always feel your individual consumption may not influence demand, collective purchasing power has been proven to have a real impact. If you’re interested, keep up to date with the latest news through the farming press, and articles put out by the NFU and Dairy UK, as well as the data produced by AHDB.
*Images sourced via Unsplash. You can connect with Anna, the author of this piece, via Instagram here.