ANNOUNCEMENTS by Arla and First Milk at the beginning of July that they were to cut the price paid to dairy producers by 1p/litre has resulted in a deepening sense of crisis within the Welsh dairy industry.
Plaid Cymru’s Shadow Minister for Rural Affairs, Llyr Gruffydd AM, called on the European Agriculture Commissioner, Phil Hogan to acknowledge that there is a crisis in the Welsh dairy sector on the day that he visited the Royal Welsh Agricultural Show.
The EU Commissioner will visited the show on Monday (Jul 20), as dairy farmers in Wales continue to produce milk at a loss with no prospect of a price increase until at least next year.
Mr Hogan has been widely criticised for refusing to acknowledge the true scale of problems facing the industry. He was criticised for claiming in January that milk prices were holding up well and there was no dairy crisis, and was further challenged to make the long overdue recognition by MEPs in the European Parliament earlier this month.
Plaid Cymru’s Shadow Minister for Rural Affairs, Llyr Gruffydd AM said: “With devastating milk price cuts at farm gate level, the short-term fortunes of dairy production is pretty grim. No business can carry on producing at a loss for very long and it is time for the Commissioner to acknowledge the scale of the crisis. Producers have seen more than a third knocked off their milk price in less than 12 months and this is having huge repercussions for the rural economy.”
The AM continued: “The Royal Welsh Agricultural Show is the biggest event in our farming calendar, and if the EU Commissioner is meeting with farmers here today then he needs to be honest with them. That means acknowledging that the dairy industry is in crisis. After seeing the Tory UK government cut the overall CAP budget by 10% and then a Labour Welsh Government cutting direct subsidies to Welsh farmers by £1/4bn, plummeting farm-gate prices come at a most difficult time.”
Pointing out the role of supermarkets in driving down prices, Mr Gruffydd concluded: “Large retailers also have a key role to play. Using milk as a loss leader inevitably devalues the product and it should not be happening.”
Optimism expressed by Welsh Conservatives that the removal of milk quotas in an already difficult market would not lead to price falls for Welsh farmers has been shown to be nothing more than wishful thinking. The fears of the FUW that abandoning quotas would adversely impact smaller producers, who predominate in the Welsh dairy market, appear at this stage to have been fully borne out.
Rob Harrison, head of the NFU’s dairy board said: “450 quitting dairy farming since this time last year in England and Wales. The recent series of cuts have highlighted the need for short-term solutions to address the problems happening now – farmers need urgent help from industry and Government. We need Government to move away from paying lip service and focus on the here and now. Their long-term solutions must take a back seat while we focus on the immediate crisis; we need them to insist on best practice in the supply chain, look at growing dairy consumption and supporting more investment in dairy processing in the UK – and this needs to happen now.”
Since 2002, more than half of Britain’s dairy farmers have gone out of business, defeated by rock-bottom prices and rising costs. For the past few months, even those that have survived have been caught up in another perfect storm. Britain consumes more than four-fifths of the milk it produces, but its price is dictated globally, by the cost of producing milk in, say, New Zealand or the US.
Economic value of red meat sector rises
HE VALUE of the iconic beef, lamb and pork sectors to the Welsh economy rose in 2020, as consumers turned to local, sustainable, quality food during the COVID pandemic, according to analysis by Hybu Cig Cymru – Meat Promotion Wales (HCC).New figures from the Welsh Government ‘Aggregate Agricultural Output and Income’ report show that the total value of agricultural output in Wales for 2020 is projected to stand at £1.7billion – a 6.2% (or £99 million) increase on the provisional figure for 2019.
Cattle and sheep account for 44% of this total at £750million; the highest proportion recorded since 2016. The agricultural output value for Wales’s pig sector also increased (by 34.3% or £2 million) to a value of £8 million.
The figures reflect the strength of the livestock sector in Wales and sit in contrast to Total Income From Farming (TIFF) figures for the UK as a whole newly released by Defra. Although the TIFF figures are a different form of measuring farm production, the UK data concurs that the livestock sector has had a strong year, but in other parts of Britain, this was more than offset by poor harvests in the arable sector.
Demand for beef and lamb have been strong in the domestic retail market since the immediate aftermath of the first COVID lockdown in spring 2020. After initial market volatility, marketing campaigns by HCC and other bodies encouraged consumers to recreate restaurant meals at home.
Over the past 12 months, domestic retail sales of lamb and beef have trended consistently higher, with spending on lamb 20% higher than the previous year. Sales at independent high street butchers are also strong.
Research shows many demographic groups, including families with children, buying more beef and lamb than previously, and turning to quality home-grown produce.
HCC Data Analyst Glesni Phillips said, “The strong demand for red meat from the domestic consumer has helped drive market prices for beef and lamb at Welsh livestock markets in the second half of 2020 and into the early months of 2021.
“It’s no surprise, therefore, to see that the overall value of the industry is projected to have grown. We have seen inflation in the costs on farmers, which offset some of the gains from improved market price; however, it’s heartening to see consumers’ support for quality Welsh produce.“Welsh Lamb and Welsh Beef remain key drivers of our rural economy, and given their excellent brand reputation, they act as flagship products for the growing Welsh food and drink sector.”Further analysis of the aggregate output and income figures for Welsh farms are available in HCC’s latest monthly market bulletin.
Ian Rickman: 2021 is a critical year for Wales’ farming future
THE INCREASINGLY negative narrative around livestock farming and its portrayed impact on the environment and climate change has led to farmers in Wales standing up to tell their stories and highlight the positive impact livestock farming has.
Through the Farmers’ Union of Wales’ campaign ‘Guardians of the Welsh Land’, farmers are addressing misleading claims by various groups about the role livestock farming plays in relation to climate change and the environment. Launching the campaign, FUW Deputy President Ian Rickman said: “The FUW has consistently recognised the threat represented by climate change and the need to take action. This is clear from a cursory look at our manifestos and policy documents published over the past twenty years.
“We know that farming is already responsible for a critical carbon resource in soils, woodland and semi-natural habitats and I’m pleased to launch the FUW’s environment campaign – ‘Guardians of the Welsh Land’ from my home farm here in Carmarthenshire today. As farmers are the most trusted link in the supply chain, they are best placed to communicate their stories, helping to address consumer concerns and influencing political agendas. Members can also look forward to a variety of webinars over the coming months, which will focus on the different challenges ahead for the industry and how to overcome them.
“There is no question in our mind that we need to counteract the continuation by the anti-farming lobby of their campaign to vilify and belittle domestic food producers. These attacks are corrosive and grossly misleading, negatively influencing consumer perception of the industry and influencing political agendas on a global scale.”
Mr Rickman added that 2021 is an important year for these types of conversations.
“Knocking on our door are the United Nations Food Systems Summit and COP26. The FUW has been engaging with these conversations at an international level and shares some concerns with other industries across the globe about the wider narrative and ambitions set out in inconspicuous looking documents. Plans, we and the general public don’t support. Telling the positive story of the guardians of our Welsh land is now more important than ever,” he said.
Starting in the first week of June, the campaign introduces four farmers all of whom tell the story of how they are addressing environmental and climate change needs in their unique ways: Carmarthenshire organic sheep farmer Phil Jones, the Roberts family from Meirionnydd, Ceredigion dairy farmers Lyn and Lowri Thomas and FUW President Glyn Roberts who farms with his daughter Beca at Dylasau Uchaf in Snowdonia.
“The campaign will further highlight that Welsh farmers are rising to the challenge of improving soil health and increasing organic matter in soils, improvements which represent further opportunities for sequestering more carbon. These improvements, the campaign will highlight, are achieved through specific livestock grazing patterns and rest periods. The campaign is also clear that the correct options, guidance and rewards are required to encourage more farmers to adopt such systems,” said Mr Rickman.
Soil, the campaign will stress, is a long term investment and at present, around 410 million tonnes of carbon is stored in Welsh soils and 75,700 hectares of Wales’ woodland (25%) is on farmland, representing an important and growing carbon sink.
“As acknowledged in Natural Resources Wales’ State of Natural Resources Report, using land for food production is an essential part of natural resource use and management. Whilst we acknowledge that agricultural intensification has undeniably had negative impacts on some species and ecosystems, there is overwhelming evidence that other factors, including reductions in agricultural activity and afforestation, have also had severe negative impacts,” he added.
Excellent Easter for lamb sales
Lamb proved a popular choice for consumers over Easter with retail sales soaring above the last two years. This demand has been reflected at livestock markets where farmgate prices are still standing strong.
At a time when lamb is always a firm favourite, this year people of all ages were both buying and spending more as a result of a renewed interest in sourcing quality, local produce and cooking at home.
In the 12 weeks to 18 April 2021, the total volume purchased was up 14.8% on the year, and 6.0% higher than in 2019. Consumer spend on lamb reached £190.0 million, which was 18.7% more than in 2020 and 14.6% higher than the same period in 2019.
Lamb leg roasting joints were the most sought-after cuts despite the fact that Covid-19 restrictions on large gatherings remained, followed by chops and mince.
Hybu Cig Cymru – Meat Promotion Wales’ (HCC) Data Analyst, Glesni Phillips said: “Lamb performed exceptionally well over the Easter period this year. It saw a 10.2% increase in the number of buyers engaging with the product and a rise of 3.3% in the frequency of which lamb was bought.
“The average price of lamb was also higher, but this obviously did not deter new buyers. The figures show that there are new buyers in all age categories, but this is especially true for shoppers aged under 45 years and those with children.
“The pandemic has led to more consumers cooking at home, giving many the opportunity to realise and enjoy the exceptional qualities and versatility of Welsh Lamb, and at the same time, support the local economy.”
Butchers also benefitted from the popularity of lamb in the run-up to Easter with total spend increasing by 16.1% on the year. The volume sold also increased, by 12.6%.
Glesni Phillips added: “As we approach the end of Spring, the consumer demand for lamb is continuing. This can be seen in the liveweight lamb prices which remain strong when compared to historical averages, with the average SQQ in Wales standing at 329.7p/kg in Wales for the week ending 15 May 2021.
“New season lambs are now entering the market – they accounted for over 70% of lambs at auction in Wales during the latest week – but the supply is still relatively tight. HCC is looking forward to working with retailers over the coming months on new activity, which will include in-store marketing, press and targeted digital communication to maintain this growth in sales. Butchers, who demonstrated their key role in the community during the pandemic, will also be offered training on a number of key skills to boost their sales even further.”
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