Moving forward with British dairy

A new chairman, a star of stage and screen, a Member of Parliament and an old war office, along with a quality cheeseboard, made for an informative night out, as Dairy UK held its annual dinner in London on Whitehall on 13 September.

The Rt Hon Mark Spencer, Minister of State for Food, Farming & Fisheries, began by noting the strong leadership of the dairy industry over the past few years during Covid-19 and now through the economic issues, has meant that the industry has continued to supply the highest quality to consumers while progressing towards sustainability goals. “We have faced a wide range of challenges, including a rise in input costs, but the industry is adaptable and resilient, and for the government, tackling inflation is our number one priority.”

He observed that Sainsbury’s has just offered dairy farmers £6 million in support, and noted the British government is offering several avenues of funding for the sector as well: a package of targeted measures for the farming sector, and the buy British campaign, which is signposting customers to buy British products. “We have to remember that around 60 per cent of the UK’s food is produced at home, and food production remains the primary purpose of farming,” he noted.

He mentioned the Sustainable Farming Incentive, which is in its 2023 incarnation. It is to offer farmers more flexibility, with actions where farmers can choose what combination of standalone ‘pick and mix’ actions they want to do and which area of land to do each action on. There is also an innovation programme to enhance productivity while reducing emissions. “There is a further £15 million for solar power, and another £15 million for robotics, and those grants open later this year,” he stated.

Looking at exports, the UK sends around £24 billion (€28bn) in food and drink products as exports abroad, and there is huge potential for dairy products, Spencer said. British products have a high reputation around the world for quality, he added.

At the recent UK Farm to Fork Summit, there were new opportunities for producers, on a range of areas. “The UK Farm to Fork Summit is the next step in growing a thriving British food and drink sector, which will put more British produce on supermarket shelves in the UK and around the world. This will also help us to deliver our clear ambition in the strategy to maintain production at current levels, where we produce domestically 60 per cent by value of all the food we need.

“The government is offering £1 million for small and medium enterprises for dairy export support, and there are now 11 attaches at embassies around the world, which are targeting the highest potential for exports and generating further demand. This includes places such as China, the US, Brazil, Northern and Southern Europe, Africa, New Zealand and South Korea. We will increase by five posts the number of agricultural attaches to reach new markets,” Spencer stated.

In other government news, it has been using its new powers through the Agriculture Act 2020 to support the sector and has made great progress in the reviews of the pig and dairy supply chains. “The dairy sector regulations will be laid in Parliament this year and, having committed to taking similar action in the pig sector, we are starting work on developing these regulations,” he stated. “There is also a review of supply chain fairness and transparency in contracts, with the regulations to ensure that farmers are treated fairly. There has been positive feedback on the collaborative approach with the participants.”

Finally, he concluded by noting, “We also have to celebrate our part in reducing the amount of greenhouse gases produced by dairy, which is down 22 per cent. We have ambitions and opportunities for this sector, and resilience. This industry is skilled at working together to feed the nation.”

The chairman

Paul Vernon, of Leprino Foods and now chairman of Dairy UK asked the assembled to look at the facts. “It’s been another challenging year for the sector. We’ve seen markets weaken from the historic highs that they reached only 12 months ago, input costs remain high, and demand has decreased due to the inflationary pressures felt by consumers – all of this generating a great deal of uncertainty.

“Against that backdrop, dairy businesses are prioritising building resilience measures into their supply chains, implementing cost reduction and efficiency initiatives, and driving the environmental sustainability agenda forward.

“The fact is, as an industry we fully recognise that we must continuously earn our licence to operate and in the last year dairy companies and farmers have made even greater strides towards an environmentally sustainable future under the umbrella of the UK Dairy Roadmap.

“Dairy UK, alongside our fellow Dairy Roadmap steering group partners at the NFU and AHDB, dairy companies, dairy farmers, and a number of key stakeholders across the dairy supply chain, have come together to try to remove or reduce the barriers which could otherwise slow progress on sustainability.

“For example, earlier this year, the UK Dairy Roadmap, through its Carbon Footprint Working Group, announced its plans to push forward

with a new project to standardise carbon footprint tools across the industry.

“It has reviewed the current carbon calculators available to dairy farmers and is working to create standardisation across the market, ensuring reliability and consistency in reporting for the UK dairy industry. The group plans to standardise emissions reporting, then investigate the calculation of carbon sequestration and its value to the dairy sector.

“The chair of the Carbon Footprinting Group, David Cotton, has been known to say that, while many dairy farmers are pressing ahead with carbon footprinting on farm, others may be put off due to the inconsistency of the final reports. The Carbon Footprinting Group under his chairmanship wants to change that so that farmers can trust the data. He’s also been known to say that farms with a low footprint are generally more profitable. Having good information and benchmarking across the sector will help to both reduce emissions and improve profitability in farming.

“Recognising that data is key, the Roadmap is also developing a database of farm data, is working on a set of ambitious targets for farmers and processors, developing advice and best practice resources to support both farmers and processors to achieve those targets, and is developing a national biodiversity plan.

“At present Dairy UK, AHDB and the NFU are working with Chirrup to measure biodiversity through birdsong on a number of farms around the UK as a three- year pilot project in a wider biodiversity agenda. We are looking forward to seeing the data shortly for year one of the project.

“Projects like this are important in providing data for the industry and to the industry and that’s why we’re doing this. But it would be remiss of me not to point out that this is something that could also be very engaging for our consumers – for showing them behind the scenes of dairying in a new and surprising way with real data.

“Being able to talk to the people who love our products is important. We know from research we’ve conducted that, whatever their age and economic status, the environment is high on their agenda. Contrary to what you might read in the nationals at times, they are still consuming and very much enjoying the taste of dairy. What they are looking for from us is reassurance that we are on the same sustainability journey as them. They aren’t looking for perfection, they are looking for shared values and an understanding that we are moving forward. And we are.

“We also know from our research that, although our consumers buy both dairy and plant-based products and use them for different meal occasion. They are far more sceptical about plant-based claims around naturalness and sustainability than in the past.

“Before anyone panics, I’m not standing here knocking plant-based, but I am standing here saying that all products should be playing with a straight bat when it comes to representing what they are and what they aren’t. At present, many manufacturers of plant-based trade under dairy names and using dairy values to sell products that have very little in common with dairy at all.

“As we enter a phase of divergence from EU law, I would like to highlight to our political and regulatory colleagues in the room how important it is that GB retains those regulations that are most important to domestic consumers and industry. We believe that the legal protection of dairy terms offers much needed consumer protection. It also allows companies to describe their products in a way which is transparent, helpful to consumers, and which ensures fair conditions of competition.”

Vernon also addressed contracts, saying, ” Minister, you talked about regulation of raw milk contracts in your speech earlier. We understand that there is still work ongoing in developing the statutory instrument and we’ll be most interested to see the final version. Contracts need to be very practical in their operation and it will be important that everyone is interpreting them in the same way and that there is a level playing field across the UK that also does not make us uncompetitive versus our competition from outside the UK.

“It is also important to note that contracts will not eliminate the volatility that is inherent in a globally traded marketplace where the laws of supply and demand determine the cost to consumers and ultimately the returns to both processors and farmers as we have seen over the last 12 months. Dairy UK would certainly welcome the opportunity to work closely with Defra as it develops the guidelines that will help inform those who need to write new contracts. They will also be important for farmers signing new contracts. In fact, we see clear guidelines as key to avoiding uncertainty, ambiguity and potentially unnecessary legal cost, so we welcome your engagement.

He also addressed other Dairy UK projects, such as the Dairy Transport Assurance Scheme (DTAS), which provides assurance to milk purchasers that the transport of raw milk and milk fractions meets food safety requirements, recognised industry good practice and specific

customer needs. “This year the scheme upgraded its standards, and these are now based on a modular format. Each member’s annual certificate, and their website listing, will display which modules they have been audited against, making it clear to potential customers exactly which operations each depot is certified for.

“The Assured Integrated Milk Supplier (AIMS) Scheme is a new initiative, launched at Dairy Tech on 1 February and is now in its pilot year before going live on 1 January 2024.

“The scheme, which is the intellectual property of Dairy UK, creates an assured milk supply pool and ensures that any milk received by dairies from an AIMS Assured Supplier will be of a comparable standard, whether traded through direct purchases, integrated haulage arrangements, swaps between parties or through a broker, thereby allowing free and open trading between companies in full confidence.

“Despite this being a new scheme, interest has been strong, with over 75 per cent of the GB milk pool already represented by the current members. If you’re one of the 25 per cent not covered by the scheme, then Ian Wakeling from the Dairy UK team is the man with all the information.”

Some lesser known Dairy UK work was also highlighted by Vernon. “In the last 12 months, our Asset Protection Team returned over 30,000 metal milk trolleys to their owners. You might wonder at the significance of that so I’ll tell you – had the scheme members had to replace those metal milk trolleys by buying new ones, it would have cost them an eye-watering £3.5 million (€4m).

“Our Due Diligence Scheme is a key scheme in keeping the industry on the front foot when it comes to the integrity of our supply chain.”

He wound up by saying, “I think we can all agree that, although none of us here has a crystal ball, we wouldn’t be surprised to see an upcoming election on the horizon. So let me take a minute to repeat something Dairy UK has said time and again to our political friends here tonight. Dairy UK and its members are ambitious for the future of the dairy sector.

“We want dairy to be recognised for the important role it plays in food security and nutrition, in livelihoods and economies and in sustainable food systems.

“We recognise that there is no perfect sector. But what we want you to recognise is that our dairy sector: works hard to find solutions to its issues, works hard to implement those solutions, and is committed to continuous improvement. We have common goals in many areas so, if you want to work in partnership with us, our door is very much open.”

He then offered a toast to former Dairy UK chairman, Ash Amirahmadi, thanking him for his chairmanship of Dairy UK and the UK Dairy Roadmap in recent years as well as for his long standing dedication to the dairy sector.

Hugh Dennis, the British actor and comedian, entertained the audience with his history of the Old War Office and growing up in Chichester. He then presented Minette Batters, the National Farmers Union president, was with the Dairy UK award for her good work in promoting the industry.

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