Sometimes you have to go abroad to appreciate what you have at home. When dairy farmers and their advisors plan Busman’s Holidays, it’s usually to New Zealand, the US, Holland or Denmark, but there’s a hidden gem just 45 miles across the Irish Sea.
The 2-hour ferry crossing from Belfast to Cairnryan/Stranraer takes you to Dumfries in Scotland, where you’ll be greeted by expansive grasslands with spectacular views of Loch Ryan.
Dumfries, a town of 33,000, is home to Crichton Royal Farm, Scotland Rural College’s (SRUC) Center for Dairy Research – essentially the Scottish version of Teagasc.
I was on a dairy tour of Nuffield in the UK and attended an appointment that touches on the heart of the UK dairy industry: the high output containment system versus the low input grass based system.
This dispute took place in the Republic of Ireland about 20 years ago.
We went with the grass based low input system but in the UK they are still hesitant.
There are three main reasons for this indecision:
Privatization of state agricultural extension/research
In the late 1980s, Prime Minister Margaret Thatcher examined the costs and benefits of public institutions.
The Agricultural Development Advisory Service (ADAS) was the organization within the Department of Agriculture, Fisheries and Food (MAFF) that conducted agricultural research and advisory services.
Thatcher’s stance was to privatize all successful parts of ADAS and shut down the rest. She proclaimed, “This government was not elected to grow flowers.”
ADAS was finally privatized in 1997. This lack of independent advice and research has left British dairy farmers disoriented and at the mercy of the market when making decisions about their farms for 25 years.
Some have survived and thrived; many don’t have it.
Private milk processing model
The key questions to ask a UK dairy farmer are: who is buying your milk and what are the terms of the milk supply contract?
This could determine the existence of a British dairy farm. With a population of 68 million people and only 7,880 dairy farmers, nine milk processors collect over 70 percent of the milk.
This leads to many variations in the nature and terms of the milk supply contracts entered into by individual dairy farmers.
In the past some processors have failed, leaving dairy farmers without a ‘milk cheque’ and not even collecting the milk, which is unknown in Ireland.
The British dairy farmer is much closer to, and more in tune with, the whims of the dairy markets.
In contrast, many Irish farmers accept that the processing and marketing of milk is someone else’s problem.
This is because most milk processing in the UK is privately owned, while most in Ireland takes place in a cooperative structure owned by Irish farmers.
Traditionally, British dairy farms are larger and wealthier than their Irish counterparts. More land and outside holdings/assets have led to stronger balance sheets.
This has saved some UK dairy farmers from making wrong investment decisions and allowed them to change course or weather a crisis better than Irish farmers over the years.
Despite the lack of national focus through advice and research over the past 25 years, many British dairy farmers are thriving.
Many farmers have traveled the world in search of advice and research to make their operations more profitable and sustainable.
Farmers living with restrictions are looking to the US for direction, while grass-based farmers are looking to Moorepark in Ireland.
The message is that good dairy farmers will always find a way.
We have a thriving dairy industry here in Ireland with a clear focus at the farm, processing, retail and government levels. But we cannot rest on our laurels.
The remaining 7,880 dairy farmers in the UK have gotten to this point by surviving the fittest in a tough, less protected market environment.
They have similar climatic advantages to Irish dairy farmers but have the added benefits of availability of land, larger farm size and a huge domestic market on their doorstep.
There are definitely more opportunities for new entrants to lease viable-scale dairy farms or enter into partnerships to generate sufficient income for all parties.
There are also plenty of options for those interested in owning/managing multiple dairy units. We have seen examples of both in Dumfries.
From my journey into the British dairy industry it is clear that we need to come together quickly and put our plan into action for the next 20 years of the Irish dairy industry.
British dairy farmers and processors have the potential to swoon us on all fronts unless we use our unified team-industry approach to innovate and execute on this plan.
Just because it worked before doesn’t mean it will work again.
Mike Brady is Managing Director of Agricultural Advisors and Land Brokers for The Brady Group.
https://www.independent.ie/business/farming/dairy/mike-brady-why-the-uk-could-overtake-irish-dairying-if-we-dont-put-in-place-a-plan-41754747.html Mike Brady: Why Britain could overtake Irish dairy if we don’t make a plan