All the country\’s biggest milk supplier have reversed price cuts following protests by angry farmers. Sigh

It\’s only going to delay the inevitable.

\”The united coalition group together with united dairy farmers, supported by the media and general public, have taken us up the first step towards a sustainable dairy industry, for the future of the next generation of dairy farmers.\”

Already the number of dairy farmers in the UK has gone down from 34,570 in 1996 to 14,500 today.

Dairy farming is becoming more efficient. We therefore need fewer dairy farmers. Propping them up through price fixing does not change this basic point. Those who can become more efficient will continue to do so: so the pressure on the price will continue.

Thus instead of a constant trickle of people leaving the industry (or perhaps more importantly, not entering it) we\’ll end up with a violent shake out at some point. Maybe not next year, perhaps not even this coming decade. But it will happen.

Is gradual change so much worse than violent such?

12 comments on “All the country\’s biggest milk supplier have reversed price cuts following protests by angry farmers. Sigh

  1. Far too simplistic an analysis here, taking only the financial impllications of milk production into account. Larger dairy herds on your so called efficient farms have hundreds of animals in close proximity, so disease and illness spread much more quickly than in smaller herds. That requires the animals to be permanently on antibiotics. The larger farms are also geared only to profit and therefore less likely to be good custodians of the countryside than the smaller farmers. I’m not sure this move is actually price fixing, it is rather adjusting the price back to a point of reasonable profit for farmers after it was driven artificially low by the purchasing power of the big supermarkets.. I am sighing too, but for different reasons

  2. Matthew Pearson

    Good grief, small farmers are more likely to be good custodians of the countryside? The dust bowls of 1930s USA were created by small farmers.

  3. The good custodianship tends to be by default, small farms generally are better for wildlife than large ones but of course that’s not the actual purpose of farming so small farmers can be just as intensive and likely to grub out hedges etc as large ones.
    Frances Coppola, the dust bowl was at least as much to do with years of drought as poor farming practice. If East Anglia was much drier it would likely be semi desert, indeed the Breckland pretty much was.

  4. Bah! Humbug!
    The CAP requires us to import milk from France and put our dairy farmers out of work. Optimal rules would restore the hill-farming subsidy and scrap net milk imports (exports of Cheddar amd Wensleydale would match imports of Brie and Roquefort, leaving France with a modest net income due to the higher prices for its cheeses).

  5. Hmmm…. the idea that a small farmer would care more about the land than a large farmer sounds like wooley thinking. Neither survives without profit long term, a more efficient/more profitable set up may be able to handle adverse problems (weather, foot & mouth, weather, disease, weather, price changes etc) with less impact on lifestyle – maybe. Some farmers utilise farm land and buildings now for other income streams.

  6. Matthew, whether you think it’s a good thing or not, it’s price fixing. Up/down, moral/immoral, a bunch of major players in a market are getting together and agreeing what to do.

  7. “The larger farms are also geared only to profit”

    And this decision has just delivered them a juicy uplift in their margin, so that some of the smaller farms can hang on by their fingertips for a while longer.

    I’m not seeing how this will discourage the practices you’re worried about.

  8. As a farmer of fairly large acreage I can state that in my experience the farmers who spend the most on environmental improvements are the most profitable ones, who tend to be the largest. You cannot spend money if you didn’t make any in the first place. Small farmers are usually one step above subsistence level, and any profits are required for living, not planting trees and digging out old ponds etc.

    Any environmental benefits of small farms are entirely coincidental – its because such farms are effectively being allowed to return to nature from lack of maintenance. Their size has nothing to do with it. The same would happen if a thousand acre estate were not maintained for a decade or two.

  9. Everyone mentions price, but no-one has mentioned quantity. Isn’t that of equal relevance? Either farmers won’t be able to sell the surplus generated by a “too high” price, or the purchasers won’t be able to sell it except at a loss. ISTM that market rigidities are at fault here.

  10. Tim: what do you think the right price would be? My analysis href=”http://pb204.blogspot.com/2012/07/the-price-of-milk.html”>suggests that 27p, let alone 25p, is well below the price at which supply and demand would balance.

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