No light at end of tunnel for struggling dairy sector

The dairy industry has been feeling the pain of low returns for its produce for more than a year now and a further decline in the latest Global Dairy Trade auction would seem to indicate that the trend is set to continue for now at least.

For Ulster Farmers’ Union dairy committee chairman Jonathan Moore there is no light at the end of the tunnel.

“Like everyone else in dairy, things are difficult,” reflected the Larne farmer on the current pricing situation.

“There is no real glimmer of light that things are turning round.

“The price has stayed down and the longer that goes on the more difficult it becomes.”

Much of the current price problems for the dairy sector have been created by global economics and are simply beyond the control of farmers on the ground.

Added to that, the basic cost of producing the milk is much greater than the price farmers receive per litre from the processors.

These factors combine to create serious pressures for the farmers trying to earn a living.

“Every dairy farmer is watching their costs - at least until there is some positive signs of things turning round. Expenditure is being limited,” explained Mr Moore.

“The price does appear to have bottomed out. Over recent months you can see it bouncing along - a few small increases before Christmas and then it declines. The real test is what happens next.”

However, it is hard to see how - or indeed when - the situation will improve.

Mr Moore continued: “Europe will soon start to calve cows. It is whether they come back into full milk production and how that affects the market which is the uncertain factor.

“Global over-supply is a problem. If Europe comes in and it doesn’t overly increase it could settle the market but if there is more milk then there could be further problems.

“It’s supply and demand,” explained Mr Moore.

“The demand is not enough to take the full supply of milk.”

The impact of poor returns for farmers goes far beyond the farm yards.

In many cases it is rural communities which feel the pain as farmers cut back on their expenditure in a bid to balance the books.

Mr Moore continued: “Optional work is simply not being done on farms. With money tight, it’s only the necessary work that is getting carried out.

“Farmers must do the necessary work - health and safety matters and animal welfare - there can be no short-cuts.

“It’s the optional items like changing machinery, replacing damaged gates and fencing that will be repaired rather than replaced.

“This affects the wider rural community. If dairy farmers don’t spend money then that has a knock-on effect.”

He added: “This is much bigger than just a problem for dairy farmers.”

Mr Moore used the recent RUAS Winter Fair and the large number of trade stands in attendance as an example of just how many businesses rely on dairy farming for a percentage of their income.

He added: “If farmers start to make do, other businesses will suffer.”

He also warned of the ‘cumulative effect’ which would see further hurt felt by the industry the longer cost-cutting continued.

It is now more than 18 months since the first signs of price problems hit the milk industry, however as Mr Moore explained there will be no quick fix.

“When prices eventually turn round there will be a level of debt that has to be sorted out before anyone can move forward,” he said.

“Debt occurred now, or over the last year or so, will have to be paid before people really start reinvesting in their businesses.

“There will be a bit of pain going forward,” he cautioned.

Charity reports increase in calls for help

The pressures being felt by farmers are familiar to the staff and volunteers at Rural Support, the charity which was set up in 2002 when Foot and Mouth disease was impacting on the province’s rural communities.

Deborah Gavin of Rural Support explained that the charity had experienced a surge in calls, particularly from dairy farmers.

“It is a very stressful and challenging time for farmers and their families due to the impact of global economic factors, outside the control of the farmers and prolonged low prices,” she said.

“It is a very frustrating time with little sign of improvement, farmers are worried about their future.

“Rural Support has experienced a significant rise in the number of calls to its helpline from dairy farmers. From the start of September 2015, 44% of the clients who are receiving financial mentoring are from the dairy sector. This service is provided by professional mentors, experienced in agriculture, to individuals who are experiencing financial stress which is having an impact on their health and well-being.”

Rural Support can provide up to three sessions of free, confidential, face to face support to assist clients to analyse their current financial/farm business position and help prioritise actions which may improve the situation.

The Rural Support helpline is available on a confidential basis for anyone who wants to speak to someone about the concerns they have. Rural Support volunteers are available to support them as they work through the challenges they face.

Deborah continued: “We want farmers to contact us and not leave it until the problem becomes a crisis.

“Rural Support will support you to take action to address financial problems and this should help ease the burden of dealing with financial stress alone. It’s okay to say ‘I’m not okay’, there is no shame or embarrassment in asking for help. If you or someone you know could benefit from talking to one of our volunteers or if you would like to avail of the Financial Mentoring currently being offered get in touch.”

Any one wishing to seek help can contact Rural Support’s helpline 0845 606 7607 8am-11pm daily. All calls are confidential.