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Farming

Dairy crisis update

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Rebecca Evans

Rebecca Evans

THE DEPUTY MINISTER FOR FARMING AND FOOD, Rebecca Evans, visited Dyffryn farm in Powys to meet owner Jonathon Wilkinson and Russell George AM

discuss some of the issues facing the sector.

Discussion covered a range of topics, including the current situation facing the dairy industry in Wales, restrictions on cattle movement and changes to the Basic Payment Scheme.

The Deputy Minister said: “It was really useful for me to speak with Jonathon and his colleagues about the issues affecting them and their businesses. It is important I continue to meet and speak face-to-face with farmers to hear their concerns.”

A recent reduction in milk prices and the prices paid to farmers has put further pressure on dairy farmers and the Deputy Minister was keen to explore how the Welsh Government can continue to help improve resilience in the sector.

“This is of course a difficult time for dairy farmers across the UK. Confidence on dairy farms had been building over the last year, with a better milk price and lower cost of production, leaving a margin on production. But we have seen further turbulence recently and a return to volatility in milk prices. By working together with the dairy sector and dairy industry as a whole, I remain convinced that we can ensure our vision of a modern, professional and profitable industry in Wales can be achieved. I am keen to explore how resilience can be increased in the Welsh dairy supply chain and am expecting to receive a report back to me on the Dairy Review in the coming weeks. We are also considering how we may increase processing capacity in Wales, but also a range of other measures relating to product development and marketing, which will be of benefit to our dairy farmers.”

In October the Deputy Minister announced that Andy Richardson, who sits on the Dairy Task Force, was to lead the review of the dairy sector in Wales. The review is to provide a strategic direction for the dairy sector across the whole supply chain, offering recommendations that Government and the industry can put in place to deliver resilience, economic growth and the creation of additional jobs within the Welsh industry.

The day after visiting Powys, Rebecca Evans met Sir Jim Paice MP for First Milk talks.

First Milk, one of the largest dairy farmer co-operatives in the UK, announced recently that they were to delay payments to producers by two weeks.

First Milk also decided to reverse the 1.1 pence per litre of the planned February milk price reductions for the manufacturing and liquid pools, increase members’ capital investment and increase members’ capital investment target from 5 to 7 pence per litre.

Following their announcement on January 8, the Deputy Minister said she would be seeking urgent talks with First Milk.

Following the meeting at First Milk’s Haverfordwest Creamery, Rebecca Evans said: “I have spoken to farmers who tell me how concerned they are about what the deferred payments mean for the cash flow of their farming businesses. I sought an urgent meeting with First Milk to better understand how the co-operative had found itself in this position, and to satisfy myself that the suite of actions taken by First Milk will be enough to put them on a sound footing. First Milk say that the actions they have taken have helped to raise enough capital to stem their own cash flow problems and put the business on a sound financial footing once again. Sir Jim assured me he had spoken with the banks in light of their decision and had found them to be sympathetic to the farmers’ situation.”

First Milk is a farmer-owned GB milk co-operative with around 1,600 members. It deals with smaller and more geographically remote farms. There are 400 Welsh dairy producers in the co-operative and the vast majority of milk produced in Wales goes to Haverfordwest Creamery to produce cheese and other milk products.

In December, the Deputy Minister announced a review of the dairy sector in Wales, which is being led by Andy Richardson. The review aims to set out a long-term strategic direction for the dairy industry, taking views from all in the Welsh supply chain and is due to report in the coming weeks.

Around 200 farmers attended a meeting in Llandisillio where they were addressed by Sir Jim Paice.

Sir Jim told farmers the business was secure. However, farmers reported that the co-operative’s decision was yet another setback after months of falling wholesale prices.

The Cambridgeshire MP said that he hoped farmers felt reassured following the meeting, adding: “We’ve had to rebuild cash in the business so that our cash flow is fine. First Milk is a perfectly solvent business and we have a long-term future, but we needed to recapitalise the business and that is what we’ve done.”

The decision affects around 400 Welsh farmers.

First Milk operates a number of milk production facilities in England, Scotland and Wales, including the Haverfordwest Creamery plant.

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Farming

Pembrokeshire Politicians Tuck into a Farmers Breakfast

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PEMBROKESHIRE Senedd Members Paul Davies and Samuel Kurtz joined local farmers and farming representatives for a breakfast to celebrate the Farmers Union of Wales (FUW)’s Farmhouse Breakfast Week 2023. Mr Davies and Mr Kurtz attended the breakfast event in Crundale to champion the benefits of a healthy breakfast and meet with local farmers to discuss the challenges currently facing the sector.

Mr Davies said, “It’s always a pleasure to attend the annual Farmhouse Breakfast and this year was no exception. I’ve always proudly supported Pembrokeshire’s produce and today was another excellent showcase of what our local farmers have on offer. We had some very interesting discussions and I’ll certainly be doing all I can to push the Welsh Government to better support our farmers as its Agriculture Bill makes its way through the Senedd. I’d also like to encourage the people of Pembrokeshire to support Farmhouse Breakfast Week too by buying local produce and enjoying a healthy Pembrokeshire breakfast – there’s plenty of excellent produce on offer, please take advantage and help support our farmers.”

Samuel Kurtz MS, local Senedd Member for Carmarthen West & South Pembrokeshire, added:

“Farming is often an isolated industry, and so the FUW’s Farmhouse Breakfast morning in Crundale Hall presented the perfect opportunity to get everyone together, in one room, talking and socialising.

“From council farm tenants to fourth-generation cattle farmers, everyone was brought round the table to taste some fantastic locally sourced produce.

“It was great to be there supporting the FUW and the DPJ Foundation, a fantastic charity that operates across the country, supporting those in agriculture and rural communities with their mental health.”

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Farming

Managing Director for new Pembrokeshire creamery announced

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PEMBROKESHIRE CREAMERY LTD, the West Wales-based business currently building a new state of the art liquid milk processing facility in Haverfordwest, has appointed Mark McQuade as managing director.

Mark brings extensive dairy industry experience from previous roles as operations director of McQueen’s Dairy, national accounts director of Muller Wiseman Dairies and as an executive board director of First Milk.

Pembrokeshire Creamery Ltd will have the capacity to bottle more than a million litres of milk a week in its initial phase and gives UK supermarkets the opportunity to offer their Welsh customers milk that is both sourced and bottled in Wales rather than being driven to England for processing which is currently the case.

By removing the need for Welsh milk to be transported to bottling plants in England, Pembrokeshire Creamery will be able to reduce food miles, increase supply chain efficiency, create new skilled jobs and support local farming communities.

Mark commented: “I am very excited to be joining the team in Pembrokeshire. We aim to be the only BRC Certified facility to offer Welsh milk that is also bottled in Wales, and as such, the new facility has huge potential. I know from having worked with Pembrokeshire dairy farmers in previous roles that this is a fantastic milk field in which to build an authentically Welsh milk supply for Welsh supermarket stores.”

Huw Thomas, CEO of Puffin Produce and Pembrokeshire Creamery board member added:

“We are delighted that Mark has agreed to join Pembrokeshire Creamery as he brings with him rich industry knowledge and experience which will help accelerate our growth ambitions.”

Construction work began in November and the plant will be fully operational by the Autumn of 2023.

Pembrokeshire Creamery Ltd has also announced a multi-million pound contract with Sycamore Process Engineering to design, manufacture and install the milk processing equipment.

Paul Manning, project director at Sycamore Process Engineering said: “We bring more than 30 years of experience in the dairy, food, and beverage industry and a strong focus on sustainability, ensuring our process solutions are energy efficient, and promoting the best OPEX with minimal product wastage. We’re working closely with Pembrokeshire Creamery to develop a top of line processing facility which meets their current needs and can expand with them as the business grows in future.”

Other businesses contracted to the construction phase include DKAN for ground works, Morgans of Usk for the steel frame and ABS Elbrow for cladding.

The development of Pembrokeshire Creamery has been supported by the Welsh Government and the EU RDP-funded Food Business Investment Scheme. Additional funding has been supplied by HSBC.

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Farming

Calls on Welsh Government to address Pembrokeshire rural poverty

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PLAID CYMRU member of the Senedd for Mid & West Wales, Cefin Campbell, has renewed calls for the Welsh Government to commit to developing a strategy to address rural poverty in Wales.

Mr Campbell’s calls follow recent figures, published by Loughborough University on behalf of the End Child Poverty Coalition that showed Pembrokeshire had the highest child poverty rate of any local authority in Wales – with 35.5% of children living in poverty.

Challenging the First Minister, Mark Drakeford, to commit to developing a focused strategy on addressing rural poverty, Mr Campbell also highlighted wider challenges within rural communities that contributed towards a pattern of “entrenched poverty” over the course of many years and generations.

Commenting Cefin Campbell MS said: “The true extent of rural poverty is often masked by the relative affluence of some rural areas and a wider culture of self-reliance within our rural communities.

Rural communities across Pembrokeshire face many unique pressures that have contributed towards a pattern of long-term entrenched poverty. These include poor access to public transport, patchy public service provision, a lack of affordable housing, and relatively low incomes and high prices. Sadly, the developing cost-of-living crisis over recent months has merely exacerbated these factors and plunged many households into further financial hardship and uncertainty.”

Previous research from the Joseph Rowntree Foundation found that most rural households typically spend 10-20% more on everyday goods and services compared to those living in more urban areas. A recent report by Sustrans Cymru also emphasised that people living in rural areas of Wales are some of the worst affected by transport poverty – with households likely to spend more than 10% of its income on the costs of running a car.

Such financial pressures were further emphasised with research from the Bevan Foundation, published last year, finding that a typical worker in Pembrokeshire is a belt-tightening £346 a month worse off than a typical UK worker.

Cefin Campbell MS added: “The hardship being faced by Wales’ rural communities is a wake-up call – and inaction in addressing such rural poverty may very well become Welsh Labour’s legacy in Wales.

It’s time the Welsh Government committed to better identifying the many unique and exclusive factors that contribute towards this rural poverty, and work with stakeholders to bring together a strategy and vision to better empower and aid these communities”.

Speaking in response to Mr Campbell’s calls for a specific rural poverty strategy, First Minister, Mark Drakeford, said: “I recognise that there are certain factors that are unique to people living in rural areas, and I can agree with what the Member said. It is sometimes difficult to identify poverty in some of our rural communities. Of course, every part of Wales is facing a challenge at the moment—whether you live in the Valleys, in the centre of Cardiff, there are unique challenges in all parts of Wales. I can tell the Member that a plan will be drawn up. The Minister for Social Justice is currently working on practical steps that we can take to help, particularly in the area of child poverty.”

Calling for action: Cefin Campbell MS (Image file)
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