The Covid-19 outbreak has seen the almost complete loss of the foodservice and hospitality markets, as well as increasing price volatility in global markets, which has left farm businesses and processors under increased pressure.
This has led to many farmers receiving significant price cuts, delays to payments and, in some cases, no other option but to dispose of milk because the processor is not collecting it.
NFU Cymru Dairy Board chairman Abi Reader and NFU Cymru deputy president Aled Jones represent NFU Cymru on a dairy focus group established by the Welsh Government. In recent meetings of the group, the pair stressed the urgency and gravity of the situation.
One-Third Of Welsh Dairy Farmers Impacted
Abi Reader said: “Since the beginning of restrictions being announced in Wales, NFU Cymru has been feeding into Government issues within the dairy sector.
“I am pleased the Welsh Government now has a specific group made up of Government and industry stakeholders seeking to work together to find solutions for the sector.
We believe there are over a third of dairy farmers in Wales who have already been severely impacted and this number is growing by the day as a result of the impacts of the Coronavirus outbreak.
“We can envisage this number rising with more processors dropping their milk prices for May. As cows begin to go out to pasture milk production is increasing daily and we expect to hit peak production in mid-May.
“We need to move fast to mitigate the impacts of this unfolding crisis on dairy farming businesses across the country.
“A key issue that needs to be addressed is that dairy farmers and processors largely cannot access the Welsh Government and UK Treasury schemes designed to help businesses through this crisis.
We cannot furlough staff or stop milking cows, and things like business rate holidays don’t apply to us.
“We need the Welsh Government to extend the eligibility of these schemes so that they can be utilised by those businesses in the dairy sector who are losing significant income right now.
“It’s important for everyone that we protect the UK dairy sector so when our cafes and restaurants open normally again, we have the dairy farmers in business with the capacity to produce milk that forms the basis of healthy and nutritious dairy products which are loved by the nation.”
NFU Cymru has called for the following:
The Welsh Government grant scheme for Small Businesses and Economic resilience Fund to be made available for dairy farming businesses affected by coronavirus market disruption.
To engage with the EU Commission about schemes such as PSA, production reduction and market promotion to help restore confidence in the market and prevent adverse publicity related to the disposal of milk.
Governments across the UK to work together to help the industry through this crisis. The UK Government should convene key stakeholders and helping to manage flows of milk through the supply chain by helping with measures such as competition law on issues such as logistics, matching supply and demand, but not on price.
NFU Cymru deputy president Aled Jones said: “I would like to thank the Minister for meeting with me and listening to the concerns of the sector. I impressed on the Minister the urgency of the situation and the need for Welsh Government to step in and support the industry.
“I am also aware that the Minister is working closely with her counterparts in England, Scotland and Northern Ireland and I hope that collectively urgent and decisive action can be taken before it is too late for many.
We need a Government-backed scheme that can take distressed milk off the market for the next two months until we return to some normality in the sector.
“We also need specific support for Welsh dairy farmers whose businesses are adversely affected by what is happening out there in the market.”