"Keep a stiff upper lip" is asking a bloody lot of dairy producers in England these days.
Remember how 2009 was for dairying in the U.S.? A similarly bleak situation is unfolding in the United Kingdom (U.K.) this year.
Since last spring, farm milk prices have dropped by approximately 40 percent to their lowest levels since 2007. Feed prices, however, have increased about 50 percent. Scores of farms are choosing to go out of business rather than continue operating at a loss.
Forecasters say things could get even worse. Many nations in the European Union are ramping up production after 31 years of quotas ended on April 1, and the European Milk Board warns that chronic milk price slumps should not be unexpected as rising supplies search for markets.
The number of U.K. dairies is currently just under 10,000. National Farmers' Union predicts there could be only half as many in 10 years, with 1,000 leaving this year alone.
As farm milk prices have dropped, calls for action by industry leaders have intensified. One of the most outspoken and colorful has been dairy producer and Farmers For Action chairman David Handley, who says he will quit the industry.
"If anybody thinks I am going to run a business and be screwed on price, they have another thing coming," he told Farmers Weekly in Surrey, England, April 1. "If you want to bury your head in the sand, sit there, and wait for the promises of tomorrow, feel free. I am not."
Handley blames the sharp decline in prices to supermarkets using milk as a loss leader to attract shoppers, which has turned milk into a "throwaway commodity." Direct-ship agreements between farmers and supermarkets account for much of the milk produced in the U.K.
(c) Hoard's Dairyman Intel 2015
April 13, 2015
