Dairy farmers ignore own labour costs (From Western Telegraph)

Dairy farmers ignore own labour costs

How many Pembrokeshire dairy farmers value their own labour costs when they calculate their total milk production costs?

According to the results of a farmer survey carried out by the Royal Association of British Dairy Farmers, the answer is very few.

According to RABDF, a farmer's own labour is worth 3p from every litre of milk he or she produces.

By ignoring this, it masks the true figure for milk production costs, says Pembrokeshire dairy producer, Robert Voyle.

Farmers work long hours but tend to ignore how much their time is worth, he said.

"Dairy companies who set the milk price take production costs into account so farmers are doing themselves a disservice by not putting a price on their own labour,'' said Mr Voyle, who milks 140 cows at Churchlands Farm, Clarbeston.

"On the face of it some farmers appear to be making a reasonable margin, but if they put a true value on their labour costs the majority would probably be making a loss.''

RABDF is urging retailers to understand farmers' true costs. "We have determined from our recent farmer survey that a further minimum 3p per litre to cover the cost of the farmers' own labour should be added to the majority of milk production costs in order to calculate the true figure,'' said its chairman, Tim Brigstocke.

Mr Brigstocke argued that signs from the marketplace suggested that it could stand a price increase on all milk regardless of the sector to which it is destined.

"Milk production has slowed up, intervention and world dairy stocks are lower than for many years and the relationship between the euro and sterling is favourable,'' he said.

Robert Voyle, Pembrokeshire county chairman of the Farmers' Union of Wales, believes that, by squeezing the milk price, processors had lost sight of innovation.

Opportunities to make new products had been overlooked because there was little incentive, he reckoned.

"There has been no incentive for them to do something because they have always taken their cut and been able to make a reasonable margin. There is not enough innovation in the marketplace.''

He could see a trend towards the situation pre-Milk Marketing Board when farmers had to find their own markets for milk and dairy products.