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 is a hidden gem just 45 miles across the Irish Sea.
two-hour ferry crossing from Belfast to Cairnryan/Stranraer brings you to Dumfries in Scotland, where you are greeted by large tracts of rolling grassland with spectacular views of Loch Ryan.
Dumfries, a town with a population of 33,000, is home to the Crichton Royal Farm, the centre of dairy research for Scotland Rural College (SRUC) — essentially the Scottish version of Teagasc.
I was on a UK Nuffield dairy tour, and I took part in a date which goes to the heart of UK dairying: the confinement, high-output system versus the grass-based, low-input system.
This argument played out in the Republic of Ireland 20-odd years ago.
We decided to go with the grass-based, low-input system, but in the UK they are still procrastinating.
There are three main reasons for this indecision:
Privatisation of state agricultural advice/ research
In the late 1980s, Prime Minister Margaret Thatcher was examining the cost and benefit of state institutions.
The Agricultural Development Advisory Service (ADAS) was the organisation within the Ministry of Agriculture, Fisheries and Food (MAFF) that conducted agricultural research and advice.
Thatcher’s attitude was to privatise any successful parts of ADAS and close down the rest. She proclaimed: “This government was not elected to grow flowers.”
ADAS was eventually privatised in 1997. This lack of independent advice and research has left British dairy farmers rudderless for 25 years, and at the mercy of the market when making decisions about their farms.
Some have survived and prospered; many have not.
Private milk processing model
The most important questions to ask a British dairy farmer is, who buys your milk, and what are the terms and conditions of the milk supply contract?
This could determine the very existence of a British dairy farm. With a human population of 68 million and just 7,880 dairy farmers, nine milk processors collect over 70pc of the milk.
This results in many variations in the type and terms of milk supply contracts signed by individual dairy farmers.
In the past, some processors have failed and left dairy farmers without a ‘milk cheque’ and even not collecting the milk, which is unheard of in Ireland.
The British dairy farmer is much closer and more in tune with to the vagaries of dairy markets.
In contrast many Irish farmers accept that the processing and marketing of milk is somebody else’s problem.
This is a because most of the milk processing in the UK is privately owned, whereas most in Ireland is in a co-operative structure owned by farmers in Ireland.
Traditionally, British dairy farm businesses are larger and wealthier than their Irish equivalents. More land and off-farm interests/assets have produced stronger balance sheets.
This has cushioned some UK dairy farmers from incorrect investment decisions and enabled them to change direction or weather a crisis better than Irish farmers over the years.
Lessons to take on board
Despite the lack of national direction via advice and research over the last 25 years, many British dairy farmers are flourishing.
Many farmers have travelled the globe in search of advice and research on how to make their businesses more profitable and sustainable.
The confinement farmers look to the US for direction, while grass-based farmers look 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 farm, processing, retail and government level. But we cannot rest on our laurels.
The remaining 7,880 UK dairy farmers have arrived at this juncture by survival of the fittest in a tough, less protected market environment.
They have similar climatic benefits to Irish dairy farmers but have the added advantages of land availability, larger farm size and a huge domestic market on the doorstep.
There are definitely more opportunities for new entrants to lease or enter partnerships on dairy farms of a viable size to provide sufficient income for all parties.
There are also many opportunities for those interested in owning / managing multiple dairy units. We saw examples of both in Dumfries.
It’s clear from my trip to look at UK dairying that we need to quickly agree and put in place our plan for the next 20 years of the Irish dairy industry.
UK dairy farmers and processors have the potential to pass us out on all fronts unless we use our unified team industry approach to innovate and implement this plan.
Just because it worked before does not mean it will work again.
Mike Brady is managing director at Brady Group agricultural consultants and land agents.