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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 farmers put spotlight on trade deals and climate change in discussions with local MP

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(left to right): FUW Pembrokeshire County Chairman Mike Kurtz, Stephen Crabb MP, FUW Pembrokeshire County Vice chairman Gerwyn Williams

FARMERS from Pembrokeshire have put the spotlight on industry concerns around the free trade deal with Australia and climate change when they met with local MP Stephen Crabb. Hosting the visit was Farmers’ Union of Wales Pembrokeshire County Vice chairman Gerwyn Williams, who farms at Upper Swmbarch, Letterston near Haverfordwest.

The farm extends to approximately 94 acres, with the majority of the land rented from Pembrokeshire County Council, and 3.5 acres owned. Upper Swmbarch is home to a 50 Suckler cow herd, made up of Limousin and British Blue cows. The calves are reared with some sold as stores, some fattened and some kept as replacements. Gerwyn Williams keeps a closed herd and uses AI. Tack sheep are kept on the land in the winter.  The land is mainly down to grass, but around 3 hectares of arable silage and 3 hectares of forage rape are grown each year to feed the livestock.

The farm has participated in the Glastir Small Grants scheme, which included planting new hedgerows in a number of locations across the farm and the holding has also previously participated in the Preseli ESA scheme, Tir Gofal and Glastir Entry.

Leading the discussions on the farm walk, Mr Williams said: “We are very concerned about the free trade deal with Australia. There will be major negative impacts for our farmers in Wales. It is absolutely essential that the UK Government ensures there are break clauses in the deal to allow for it to be reviewed. We need the UK Government to stand with the farming sector and help develop export opportunities for our farmers here at home.”

Union officials further highlighted concerns around beef prices and uncertainty within the industry as to what would happen as covid restrictions continue to be lifted and more people begin to eat out. Farmgate prices declined significantly during the early stages of the pandemic given the loss of demand from the UK foodservice sector for premium products such as steaks and cheese, and yet 12 months on, the sector is witnessing soaring lamb and beef prices following a shift in reliance on local food producers and UK sourcing.

(left to right):  FUW Pembrokeshire County Chairman Mike Kurtz, Stephen Crabb MP, FUW Pembrokeshire County Vice chairman Gerwyn Williams and FUW Deputy President ian Rickman

“While the domestic foodservice sector is evidently an essential outlet for Welsh produce, it is equally a particularly price sensitive outlet through which large volumes of foreign imports are sold. The FUW is concerned that if trade policies allow for cheap food that undermines our world-leading standards to be imported into the UK, the foodservice sector could become an even larger outlet for such food given that the transparency and pressure to source domestic produce is not applied to the same extent as it is with retailers,” added Gerwyn Williams. 

Mr Williams added that whilst the proportion of local produce procured by some public bodies has increased over recent years, there remain significant numbers of administrations which fail to support Welsh agriculture, choosing instead to accept produce from countries which often fail to meet the high production standards which are a requirement in Wales. 

“The nature of some procurement contracts means that what appears to be a commitment to procuring Welsh and British produce within procurement rules can be circumvented by carefully worded clauses.

“The impact of Covid-19 on food supply chains in many parts of the world has served as a stark reminder of the dangers of relying on food imports. Domestic policies and trade deals which undermine sustainable food produced by family farms in Wales subsequently place food security, food standards and therefore farmgate prices at risk. Governments must recognise the sheer importance of maintaining and supporting food production, security and standards,” he said.

Addressing concerns around climate change, Union officials  discussed how targets are set by the Government and how the UK and Welsh industry is portrayed negatively in the climate change debate. FUW Deputy President Ian Rickman said: “Many of the facts and figures used in the conversation around climate change relate to non-UK systems of production. 

“Here in Pembrokeshire ,and across Wales, farmers are adopting climate friendly systems of producing food and looking after the land for example through minimal or no till cropping, grass based production systems, planting of hedgerows, and habitat management. We can’t just get rid of the livestock, or drastically reduce it. Livestock play an essential role in looking after the land. Many habitats have to be grazed in order for them to flourish. 

“Our dairy industry is also doing their bit and many dairy farmers are already undertaking carbon footprint calculations and producing nutrient and biodiversity plans as part of their milk contracts. Farming must be seen as the solution to the climate problem and not its root cause.”

Given the many obstacles farmers now face, including the NVZ regulations and bovine TB, Union officials further stressed that recruiting young people into the agriculture sector and sourcing labour was becoming increasingly difficult.

FUW Pembrokeshire County Chairman Mike Kurtz added: “Recruitment seems to be a common problem in relation to vocational occupations that needs to be addressed. 

“I would like to thank Stephen Crabb for meeting with us again and discussing so many issues that trouble the industry. We will continue to work with the UK and Welsh Government to ensure we have thriving, sustainable family farms here in Wales for generations to come.”

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Farming

Economic value of red meat sector rises

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THE VALUE of the iconic beef, lamb and pork sectors to the Welsh economy rose in 2020, as consumers turned to local, sustainable, quality food during the COVID pandemic, according to analysis by Hybu Cig Cymru – Meat Promotion Wales (HCC).New figures from the Welsh Government ‘Aggregate Agricultural Output and Income’ report show that the total value of agricultural output in Wales for 2020 is projected to stand at £1.7billion – a 6.2% (or £99 million) increase on the provisional figure for 2019.


Cattle and sheep account for 44% of this total at £750million; the highest proportion recorded since 2016. The agricultural output value for Wales’s pig sector also increased (by 34.3% or £2 million) to a value of £8 million.
The figures reflect the strength of the livestock sector in Wales and sit in contrast to Total Income From Farming (TIFF) figures for the UK as a whole newly released by Defra. Although the TIFF figures are a different form of measuring farm production, the UK data concurs that the livestock sector has had a strong year, but in other parts of Britain, this was more than offset by poor harvests in the arable sector.


Demand for beef and lamb have been strong in the domestic retail market since the immediate aftermath of the first COVID lockdown in spring 2020. After initial market volatility, marketing campaigns by HCC and other bodies encouraged consumers to recreate restaurant meals at home.


Over the past 12 months, domestic retail sales of lamb and beef have trended consistently higher, with spending on lamb 20% higher than the previous year. Sales at independent high street butchers are also strong.


Research shows many demographic groups, including families with children, buying more beef and lamb than previously, and turning to quality home-grown produce.


HCC Data Analyst Glesni Phillips said, “The strong demand for red meat from the domestic consumer has helped drive market prices for beef and lamb at Welsh livestock markets in the second half of 2020 and into the early months of 2021.


“It’s no surprise, therefore, to see that the overall value of the industry is projected to have grown. We have seen inflation in the costs on farmers, which offset some of the gains from improved market price; however, it’s heartening to see consumers’ support for quality Welsh produce.“Welsh Lamb and Welsh Beef remain key drivers of our rural economy, and given their excellent brand reputation, they act as flagship products for the growing Welsh food and drink sector.”Further analysis of the aggregate output and income figures for Welsh farms are available in HCC’s latest monthly market bulletin.

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Farming

Ian Rickman: 2021 is a critical year for Wales’ farming future

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THE INCREASINGLY negative narrative around livestock farming and its portrayed impact on the environment and climate change has led to farmers in Wales standing up to tell their stories and highlight the positive impact livestock farming has.


Through the Farmers’ Union of Wales’ campaign ‘Guardians of the Welsh Land’, farmers are addressing misleading claims by various groups about the role livestock farming plays in relation to climate change and the environment.  Launching the campaign, FUW Deputy President Ian Rickman said: “The FUW has consistently recognised the threat represented by climate change and the need to take action. This is clear from a cursory look at our manifestos and policy documents published over the past twenty years.

“We know that farming is already responsible for a critical carbon resource in soils, woodland and semi-natural habitats and I’m pleased to launch the FUW’s environment campaign – ‘Guardians of the Welsh Land’ from my home farm here in Carmarthenshire today. As farmers are the most trusted link in the supply chain, they are best placed to communicate their stories, helping to address consumer concerns and influencing political agendas. Members can also look forward to a variety of webinars over the coming months, which will focus on the different challenges ahead for the industry and how to overcome them.


“There is no question in our mind that we need to counteract the continuation by the anti-farming lobby of their campaign to vilify and belittle domestic food producers.  These attacks are corrosive and grossly misleading, negatively influencing consumer perception of the industry and influencing political agendas on a global scale.”
Mr Rickman added that 2021 is an important year for these types of conversations.

“Knocking on our door are the United Nations Food Systems Summit and COP26. The FUW has been engaging with these conversations at an international level and shares some concerns with other industries across the globe about the wider narrative and ambitions set out in inconspicuous looking documents. Plans, we and the general public don’t support.  Telling the positive story of the guardians of our Welsh land is now more important than ever,” he said.


Starting in the first week of June, the campaign introduces four farmers all of whom tell the story of how they are addressing environmental and climate change needs in their unique ways: Carmarthenshire organic sheep farmer Phil Jones, the Roberts family from Meirionnydd, Ceredigion dairy farmers Lyn and Lowri Thomas and FUW President Glyn Roberts who farms with his daughter Beca at Dylasau Uchaf in Snowdonia.
“The campaign will further highlight that Welsh farmers are rising to the challenge of improving soil health and increasing organic matter in soils, improvements which represent further opportunities for sequestering more carbon. These improvements, the campaign will highlight, are achieved through specific livestock grazing patterns and rest periods. The campaign is also clear that the correct options, guidance and rewards are required to encourage more farmers to adopt such systems,” said Mr Rickman.
Soil, the campaign will stress, is a long term investment and at present, around 410 million tonnes of carbon is stored in Welsh soils and 75,700 hectares of Wales’ woodland (25%) is on farmland, representing an important and growing carbon sink.
“As acknowledged in Natural Resources Wales’ State of Natural Resources Report, using land for food production is an essential part of natural resource use and management.  Whilst we acknowledge that  agricultural intensification has undeniably had negative impacts on some species and ecosystems, there is overwhelming evidence that other factors, including reductions in agricultural activity and afforestation, have also had severe negative impacts,” he added.

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