Superdairy; the Legacy
Recently I was a panellist at a debate organised by Lincs FM where members of the public could send in questions to the owners of the company that has applied for permission to build a 4000 cow herd at Nocton. During the ‘question-time’ style debate one question was read out that got me thinking.
The questioner asked “in a hundred years’ time what will be the legacy of the Nocton superdairy?”
In order to answer the question fully I think that firstly we need to recognise that the superdairy concept is a product of the fundamental problems in the UK dairy sector today and the desperate need for a coherent strategy for a viable sustainable future. And then we can consider the legacy of the superdairy concept.
It seems to me that the advent of the superdairy is not, as government and some farming leaders would have us believe, a solution to the problems faced by the dairy sector but is, in fact, a symptom of the problems facing British dairy farmers.
Indeed the government is exacerbating the problem by insisting that UK producers should be able to compete at world market prices. This is a non-sense because its demanding that the UK dairy sector should lower its high standards of animal welfare, social reponsibility and environmental protection to those of the lowest in the world in order to produce milk to lower unit cost so that others in the food chain can add exorbitant profit margins. What governent should be demanding is that UK producers maintain their high standards and then work to raise the standards of those in the rest of the world.
The greatest issue determining the future viability of the UK dairy sector is the well documented truth that the retailers and food processors are not passing a fair share of the profits in the milk chain back to the producer.
What we see in the milk chain is an inequality that is crippling our dairy sector. Today the supermarkets are taking 22p for every litre they sell but the dairy farmer gets just 26p for the time and investment needed to produce that litre. But ten years ago the supermarkets made just 8p on every litre and the producer received 18p – so in the past ten years the supermarkets have increased their share by 300% whilst the producers share has increased by just 30%.
This inequality in the milk chain demonstrates that there is no linkage between the farmgate price and the retail price and there is plenty of evidence that the retailers are taking every opportunity to increase their profit margins at a cost to both the producer and the consumer.
The superdairy concept is an attempt to find a production model that can survive the relentless pressure of supermarket bullying so it’s against that financial background that the legacy of the superdairy will be determined.
Economic analysis of a superdairy indicates efficiencies of scale equal to around 2 ppl below that of a traditional family dairy farm. However even with these efficiencies the superdairy is unable to survive at world market prices and will need to muscle in to premium markets for liquid milk and branded dairy products in order to survive. Therefore the superdairy will displace between 60 and 100 traditional dairy farms from the premium markets they need to survive.
There is a belief that superdairies and traditional dairy farms can co-exist but analysis of the economics demonstrate that co-existence is not possible and that the superdaiy’s lower production costs will have the effect of driving down the benchmarked price for existing premium contracts thus putting the vast majority of existing producers in financial jeopardy.
Ultimately, with the exception of those producers supply organic and niche markets, all 11,000 traditional UK dairy farms will be replaced by around 120 superdairies and the sight of cows grazing in fields will become a thing of the past. This will have a lasting effect on our countryside, on the viability of our rural economy, and our rural communities.
And perversely whilst being so damaging to the existing dairy sector the superdairy is just as vulnerable to retailer dominance of the milk chain and fluctuations within the market place as every other producer.
Even more damaging to the longer term future of dairy farming is the enormous public concern surrounding this application. Often its only public support for British dairy farmers that stands between the producer and the full force of the international market place and the voracious supermarket buyer and producers lose that support at their peril. Branded ‘battery cows’ in the public conscience there is a strong antipathy to the concept of keeping cows indoors all year round and the superdairy concept is a step too far for a public becoming increasingly concerned about the growing industrialisation of our livestock sector.
How long before consumers watching tv adverts for New Zealand cows in sunny fields and Irish cows in rainy fields begin to question their support for UK dairy farmers who keep their cows in sheds? And when that happens and consumers no longer feel the need to support UK dairy produce the retailers will be free to source from the cheapest producers in the world – regardless of low standards of animal welfare or social and environmental responsibilty.
This is a threshold moment for our dairy sector. If we – farmers, politicians and consumers – embark on a future that is dominated by the superdairy I fear we will change our countryside irrevocably.
I fear that the legacy of the superdairy will be that those living near a superdairy will have their quality of life adversely affected through smell, noise and pollution.
And I fear that nationally we stand to lose so much more that makes our countryside so valued because, when the first superdairy gains permission we will lose our tradition of dairy farming that ensures our high animal welfare standards, that enhances our environment, supports our rural economy and creates the countryside that we all cherish.