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Hi Mike

Just received the latest issue of Farm Ideas.--- another great issue keep up the good work !!

A good caption for the photo on page 37 would be

Three Wise Monkeys--Hear no evil--see no evil--speak no evil !!

Jack Smith

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Why 1p a litre is vital to ASDA milk suppliers

A penny a litre doesn't seem like too much to make a fuss of, but in milk production today every penny counts. The cost of keeping cows rises, as tractor fuel gets more expensive, wages improve, rules and regulations get tougher.

For more than a decade farmers have been earning nothing from milking their cows. They have been living on the B B which they run, the mobile phone mast on their land, the 4x4, paintball, shooting rights, caravan site and, of course, their off-farm earnings driving a lorry, or their wife, son and daughter going out to work.

Cows are a habit, and a tradition which is hard to change. It's a long term, a life-time job for many in the business. It's very easy to become so absorbed with the job, which as everyone knows starts at around 5.00am every morning of the year, that the income is unimportant. Giving up the cows is life-changing - it's as hard as marriage break down. Selling up is a public admission of defeat, not a rational business decision. So farmers will keep plodding on, with hope in their heart that things will improve.

And, for a while, they did. The numbers of dairymen throwing in the towel was becoming a worry to the people whose job it is to have milk on the shelves - the supermarkets. So some decided it would be valuable to have specific contracts with individual farmers through a dairy company. If the supply got tight these farmers would allow the shelves to be stocked.

ASDA has been supplied by a dairy business called Arla (Arla Foods Milk Partnership) who collect, process and bottle their milk throughout the country. ASDA is in some ways unusual in having a single supplier. Sainsbury, for example, uses both Robert Wiseman and Dairy Crest, and it is their flirtation with Arla which may have caused the upset. While welcoming Arla as a supplier, Sainsbury reduced the business they did with Dairy Crest, who then are on the warpath for more contracts, and it is just possible they have got a foot in the door at ASDA.

It's all fair in love and war, but the poor chap at the end of the chain, the man who is married to his cows and gets up at 5.00 every morning, is, as always, the loser.

What can be done? Milk contracts are fabulously skewed towards the buyer, despite the new regulations www.farmideas.co.uk/newsdetailed.php?id=62 The free market might provide consumers with low cost milk at present, but only as long as farmers are prepared to do the job for nothing.

Maybe they should all be planning to create super dairy farms, like the 8,000 cow farm factory planned in Lincs? There's little evidence to suggest that herds of this size really have the economies of scale to produce milk at much lower a cost than the smaller herds we have at present. dairy farming in the UK is pretty efficient, by any standards. The one major advantage the mega-farm has is in transport costs, which are out of the farmers control, but there some useful ways of improving this.

Let's hope we'll continue to see cows grazing the fields in the summer months, and have milk from our meadows on the shelves, rather than milk from Poland, Latvia and other countries.