IP Dairy Farmer - January 2021

Posted on: 20/01/21

Last month’s article resulted in 37 email responses and regrettably, the majority (36!) were decidedly negative as to Red Tractor’s current performance, and commented that my last article was close to a bullseye. Indeed, one who had significant experience in milk processing and marketing - as well as arable and dairy farming - stated that “I have experienced the Red Tractor Scheme from both sides of the fence and it’s not fit for purpose”. 
He, and others, certainly have more faith in milk processors who have their own standards, quoting Arla and First Milk as examples of processors “taking the lead with dairy standards to uphold and protect our industry’s reputation”. He mirrored several others who, in general, are convinced that “current standards are pretty ordinary and so very easily open to abuse”. He closed by stating “Red Tractor have either to significantly up their game – or get out!”.

On the basis of those comments, the organisation still has a huge mountain to climb to gain the confidence of many dairy farmers, and faces significant challenges despite having made steps to turnaround the operation. 
The news that Christine Tacon is the new chair of Assured Food Standards (AFS), the parent body of Red Tractor Scheme, has generally been a popular appointment. In last month’s article I stated that the organization needed a good turnaround chair who was non-political, who would drive change and not be pushed around by the owners. On paper Christine is, in my opinion, one of a small handful of non-political replacements, and on that point she gets a big thumbs up from me! If she is given the freedom to do her job, without been shackled or constrained by any representatives who sits on the ownership body, she should be best in class. For sure AFS have made a better job of appointing Baroness Lucy Neville-Rolfe’s replacement than they did in handling her exit. 

Two representatives involved at the sharp end of standards point the finger firmly at some of the NFU representatives who sit on the relative boards and committees as being guilty of blocking and frustrating the need for change on standards. One knowledgeable person from that inner circle stated that many of these representatives urgently need to take a good look at themselves and be honest as to whether their actions are holding back change and contributing to Red Tractor’s reputational demise in dairy. The accusation is that it is a major sticking point for one or more of the NFUs who sit on the ownership board for them to allow a failing or failed dairy farmer to be ousted from the Assurance scheme, and effectively put out of business with nowhere to sell their milk. “It’s not in their genetic composition to allow this to happen”, they told me. Another claimed Red Tractor is now viewed by processors and retailers as a “talking shop with no action!” 

On the flip side, one of the critics balanced their view by commenting that if a revitalized Red Tractor scheme is to survive and have worldwide recognition and respect from all (including its farm assured dairy farmers) then there is likely to be a case for farmers and processors having to stump up more money to fund it. This rings true given two assessors have informed me they used to carry out a maximum of two audits a day, and are now targeted to do a minimum of three or four, and that the inspections are now time limited and far from comprehensive. In many cases the inspections are more a desk and box ticking exercise. 

So while I welcome feedback on this article, I urge all who are interested to click on this link https://redtractor.citizenspace.com/ and submit your views on its latest proposals, which it is consulting on, under the heading “What matters to you and your business”. Now is the time to challenge Red Tractor, because it’s a once in every four years opportunity. Unless Red Tractor changes and continues to fail then other processors will step into their shoes with their own higher and better standards.

In this pandemic producing high quality dairy products is just the start because to win over more consumers and to retain their complete trust in British farming we have to have transparent production methods and demonstrate the care we have for the animals at every stage of their life. If we succeed here our consuming public will back British more than before. 

The treatment of cross bred calves produced by so called spring grazers is still to be solved. Euthanasia, even if done by the book, will lose us public support, as will calves going to an abattoir at a few weeks old. For those involved the rearing of the calves is often a huge burden and financial liability. There are moves to buddy groups of dairy farmers with calf rearing units and/or arable farmers, but it is not easy particularly where TB jumps into the ring. Finding viable and acceptable solutions is not easy, but they have to be found. 

Turning to the immediate future and milk price prospects it’s a certainty that by February 1st, or with a magical touch from my brother Harry’s wand, maybe March 1st, farmgate liquid milk prices will experience a downward price correction. Milk is plentiful at farm level, and this week lockdown has seen more surplus milk from liquid processors on the spot market with prices dropping to 22 to 23ppl. Cream is down by between 3ppl and 4ppl equivalent to a liquid processor. So, for a 100% liquid middle ground processor surplus milk will rack up some big numbers and given the margins, or rather lack of margin, there are no reserves to smooth out this volatility. 
What is required is a late, cold spring to reduce production unless (by some miracle) farmers will collectively cut production by 2% or 3%, in other words much the same as Muller Direct farmers were told to do last spring.  It certainly seemed to be effective. On the plus side cheese sales look good, and with people in lockdown butter sales for home baking are rocketing. 

The bottom line is the UK liquid model remains broken and cannot continue on the thin and non-existent margins. But that’s for another day!

Comments to ianpotter@ipmsltd.co.uk