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NFU boss predicts dairy industry upturn as buyers focus on supply.

A brighter future for dairy farmers was forecast last night as the industry geared up for today's Welsh Dairy Show. Former Carmarthenshire milk producer and NFU president Tim Bennett told the Farmers' Union of Wales-HSBC Bank eve-of-show reception improved farm-gate prices would restore confidence despite feed cost increases.

"Milk supply is more valued by buyers who worried about falling production, even before the world upturn in price, and are looking for supplies," said Mr Bennett, shadow chair of the UK dairy levy board.

"I do not want to predict price, but the outlook is more robust than for many years."

The improvement would also allow the industry space to stand back and plan for the future and would lead to new opportunities including some consolidation in the supply chain.

"I particularly welcome the proposed merger of First Milk and Milk Link - it has to be good for all producers, including Welsh farmers," he said.

"Despite the increase in price being driven by commodity markets, the need to differentiate products to add value will be just as critical in the future and that includes dedicatedS supply chains, but giving a guaranteed supply to high standards on contract has to reward everyone in the chain."

Mr Bennett said the outbreaks of foot-and-mouth and Bluetongue disease this year had added to the costs and complexity of farming in a competitive world and made life very difficult for Welsh farmers.

The cost of the outbreaks to dairy farmers - such as low barren cow and calf prices due to the lack of exports and livestock movement restrictions - had almost been forgotten.

"The attention has been on other sectors that have been affected more, particularly the sheep sector, but dairy farmers want more acknowledgement of their extra costs as well," said Mr Bennett, who also sits on the Levy Board UK which, as the Agricultural and Horticultural Development Board, will replace all existing statutory levy bodies on April 1.

He said the dairy industry had been through traumatic times since the ending of the Milk Marketing Board mainly because of increasing exposure to the global market.

"The consequence of this period has been low profitability, a massive reduction in dairy producers and despite this, until very recently, an astounding ability to maintain milk production," said Mr Bennett, who has a livestock farm near Carmarthen.

"When I started milking cows there were around 100,000 producers producing less than 13 billion litres. Now there are fewer than 15,000 producing nearly 14 billion litres. "Most people outside the industry regard this as a sign of great technical efficiency. Of course it is, but the social consequences have been huge.": Minister to launch action plan for dairy sector:A plan to create a profitable Welsh dairy sector, which benefits the people of Wales, will be launched at the Welsh Dairy Show today by Rural Affairs Minister Elin Jones. The strategy, to be launched at the Welsh Assembly Government's Farming Connect stand at 11pm, will outline how the dairy sector can meet the needs of the market, add value to milk and milk products, protect the environment and ensure animal health.

It will also set out how dairy farmers can capitalise on features like the Welsh climate and landscape and its image of healthy food, and it will detail the range of support available for producers.

These include grants for small and medium-sized food production companies and to improve efficiencies in the food chain.

"I am well aware of how exposed the Welsh dairy farmer is to the factors that drive the global supply and demand of milk products and I also recognise the challenges that the industry faces in terms of the costs of production," said Ms Jones yesterday.

But she said change brings challenges and opportunities, and Wales had a number of competitive advantages that could be exploited. "I believe this plan provides the dairy sector with the support it needs to thrive in the future."
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Publication:Western Mail (Cardiff, Wales)
Date:Nov 13, 2007
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