NFU's Raymond speaks to Welsh dairy farmers at Pembrokeshire

“Given the right support from the supply chain Welsh farmers have a genuine opportunity to capitalise on growing domestic and global demand for dairy products,” that’s the message for local milk producers from NFU Cymru at this year’s Pembrokeshire Show.

Speaking on the first day of the show Mansel Raymond, who is currently Pembrokeshire NFU Cymru County Chairman as well as Chairman of the NFU England and Wales Milk Board, sets out why the Union feels market conditions represent an opportunity for dairy farmers to invest and grow their output, but, immediate concerns remain over how slow the supply chain is to pass back price rises to dairy farmers.

Raymond said, “South west Wales remains a stronghold for dairy production with close to 10% of GB milk production located within little more than an hour of this showground. Despite the difficulties the sector has faced over the last decade we can be very proud of the commitment and investment made on farms; the professionalism of the workforce and this alongside our favourable conditions for grass growth means I have confidence in the future of milk production in this area.

“To capitalise on this opportunity to grow our industry we must tackle the estimated £1.5billion trade deficit on dairy products. We calculate that to reduce that deficit to zero, to be in a balanced trade, by displacing imports and growing exports, the demand for extra raw milk in the UK could be equivalent to an additional 4-5 billion litres.

“I believe farmers are up for this challenge but for us to make this long term commitment and to grow our business the rest of the supply chain must recognise the need for significant and on-going investment at farm level. We estimate that the investment required to continue to increase efficiency and grow output would equate to 3.5pence per litre annually. Farmers need the confidence therefore that they will have a fair share of the value of the final product.

“This confidence and importantly trust in the supply chain comes from fair contracts in line with the dairy industry code of practice for contractual relations. In this part of Wales, where so little of our milk is sold through dedicated retailer supply chain relationships, what farmers would dearly love to see would be transparent contracts with a determinable milk pricing mechanism, then farmers would truly feel that they will be given a fair return from the markets that their milk is being sold into.

“Unfortunately we continue to see farmgate milk price lag well behind the key market indicators. This has to change and farmers rightly expect to receive imminent price increases to bring our milk price in line with current market conditions.

“We do respect that alongside investment on farm similar investment needs to be made in state of the art processing facilities and we hope that the work of the newly established Dairy Task force for Wales, with representatives from all parts of the supply chain, can look at the potential for adding value to more of our milk in Wales.”

In conclusion Mr Raymond said, “I do believe that opportunities exist in the current climate to expand and grow dairy output. For this to be achieved however, farmers need some security that they will receive their fair share of value from the market place. My focus representing members in Pembrokeshire and throughout England and Wales in my capacity as Dairy Board Chairman is on delivering fairness for primary milk producers.”