1600 farmers find new homes for their milk, but the remaining 200 will struggle to continue in dairy farming

PricewaterhouseCoopers LLP, receivers and managers of Dairy Farmers of Britain (DFB), the Milk cooperative that went into receivership two weeks ago, now only have 200 of the 1800 farmer members left to collect milk from.

The farmers, half of whom had given notice to quit the co-op prior to the appointment of receivers, were released from their contracts and given the freedom to leave immediately on PwC’s appointment. This strategy, which has broadly been welcomed by the industry, has allowed 1600 to leave for alternate milk buyers.

Stephen Oldfield, agribusiness leader at PwC and joint receiver said:

"I am pleased that there are only 200 farmers remaining within 2 weeks of our appointment which validates our strategy of taking the contractual handcuffs off DFBs members. It is an extremely complex supply chain and finding so many farmers new homes for their milk so quickly is a real achievement. We would not be in this position so quickly were it not for sterling work by the DFB member council led by Stephen Yates and by the DFB milk supply team led by Martin Armstrong."

The receivers’ attention is now focused on those remaining farmers who appear to have no alternative buyer for their milk. These farmers are principally based in the North East and North Yorkshire, Cumbria and Lancashire, south of Manchester and a smaller number in South Wales.

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Stephen Oldfield continued:

"We must now turn our focus onto helping those with no apparent choice but to ask us to continue to collect their milk. These are farmers who either have small herds which are below minimum pick up volumes for the alternate buyers or are situated in some of the most remote and beautiful areas of our countryside such as the Lakes, North York moors and the Dales.

"Some are young farmers just starting out who have not yet built up their herds to a size that is attractive for milk buyers. This is really concerning as the industry is struggling against low economic returns to attract new blood into dairy farming. The average age of a dairy farmer in the UK is 59.

"We will continue to collect from them, but due to the very significant costs of tanker haulage to collect their milk, we are only able to guarantee a minimum base price of 10p per litre. I hope to be able to pay more than this and am continuing to ask customers to pay a fair price for the farmers’ milk. However, the minimum 10p price is simply not economic for these farmers and, unless something is done, they will have no alternative but to exit dairying by culling their cows or selling up their herds.

"I have therefore met again with Defra and representatives from Dairy UK and the Farmers unions to see what can be done to help these farmers. Following that meeting, the push is to try and find alternative dairy buyers for the farmers’ milk. If not, there will need to be a way of giving farmers a viable farming alternative or a dignified exit from farming."

ENDS