Issue 270 : 11 December, 2009 This week, Dairy UK has: - Met the Carbon Trust to progress work on a carbon footprinting guide for dairy - Briefed a Japanese delegation on footprinting - Attended a meeting on feed and satfat at Reading - Attended a meeting of the European Dairy Association in Brussels
Is Copenhagen all hot air? Don't know No Yes 0%
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>> DG’S BLOG P4 >> NEXT WEEK’S POLL: “IS ANYONE HEEDING CALLS TO EAT LESS DAIRY?”
This week’s top story... Dairy UK lobbies for dairy at Copenhagen As Dairy UK News went to press, EU leaders had offered to pay €7.2bn over the next three years to help poor countries deal with the impact of climate change. It was hoped that the offer would boost talks in Copenhagen on a new climate change treaty. Dairy UK Environment Manager Fergus McReynolds was at the conference ahead of tomorrow‟s (12 December) Agriculture and Rural Development day, looking at the issues relating to farming and food production. McReynolds has been meeting national delegations to argue the case for dairy and to draw attention to sustainability initiatives already under way. He has been raising the profile of the global dairy industry‟s recent Agenda for Action on Climate Change and the UK‟s Milk Roadmap. Talk from a number of the national teams, including the US, India and Denmark, indicates that they see the carbon mitigation potential in agriculture. Several said that environmental sustainability had to be balanced with the need to secure food supplies for a growing world population. Jacques Diouf, head of the UN‟s Food and Agriculture Organisation, said that farming‟s contribution to lower emissions would come 10% from cutting greenhouse gas output and 90% from the natural sequestration of carbon in soils and crops. Tomorrow, McReynolds will attend a meeting of the International Federation of Agricultural Producers to hear a report on the inclusion of agriculture in negotiations. He is also expecting to meet the UK and EU delegations. The conference concludes on Friday (18 December). See www.dairyuk.org for updates.
Industry news Industry takes the next steps in building a national Johne’s strategy Dairy UK wrote to delegates at last week‟s conference on Johne‟s to outline the next steps in constructing a national programme to control the cattle disease. Co-signed by Jim Begg and UK Dairy Farmers Forum Chairman Roger Evans, the letter spoke of a new Johne‟s Action Group being convened. Invitations to join the group will be sent out to key figures in the farming sector, veterinary profession, government, processing sector, farm consultants and milk testing companies. The aim is to hold a first meeting in January to drive forward progress in a number of areas, including research and funding, knowledge transfer, building awareness and monitoring. Confirmation that the group is on the right track came in the form of dozens of emails of support from different sectors of the industry. A public page on www.dairyuk.org has been set up to keep the industry informed of progress.
High Level Group focusing on German milk contract model The EU‟s High Level Group on Dairy is edging towards the German model of collective bargaining over raw milk prices, Defra told Dairy UK‟s Strategy Committee this week. Member states in the group see this as a means of redressing the perceived imbalance of power in the dairy supply chain. But there should not be any great disruption to the way in which the UK industry‟s relationships work, Defra said. That was because the German model fairly closely resembled the co-operative milk brokering model. Mooted guidelines on good industry practice for milk contracts should not be too prescriptive. The HLG is scheduled to make its recommendation in June next year. LIFFE futures available in the middle of next year Futures contracts for butter, skimmed milk powder and sweet whey will be launched by mid-2010 in London, according to NYSE Liffe. The derivatives exchange met Dairy UK on Thursday (10 December) to discuss marketing these products to dairy companies in the UK and the EU. Liffe recognises that it has a significant task to educate a sector that is currently unfamiliar with the uses and benefits of futures instruments. Dairy UK offered to help, on the basis that futures contracts should help dairy operators to minimise their price risk. Dairy UK to host renewable energy conference Dairy UK will work with members to develop the programme for a conference on renewable energy in the dairy sector early next year. Through the Milk Roadmap, large dairies are committed to sourcing 10% of nontransport energy from renewable sources or combined heat and power systems by 2015. Dairy UK‟s conference will explore the application of technologies, such as wind, solar and hydro generation as well as anaerobic digestion and geothermal technologies. Watch this space and www.dairyUK.org for more details in due course. Pakistan’s White Revolution creates business opportunities Pakistan is seeking to expand its dairy industry, creating opportunities for companies and individuals to do business there. Dairy UK has already been approached by a venture capital company with high level contacts in the Pakistan and UK Governments. Areas of opportunity include: Setting up in Pakistan, possibly as a joint venture, manufacturing and marketing pasteurised milk, flavoured milk, UHT milk, cheese, yogurt etc Selling redundant equipment or complete processing sites to operators in Pakistan Selling expertise to operators in Pakistan covering dairy farming, farm management, farm cooperatives Reading proposes research on animal feed Funding is being sought for a research project into novel animal feeds that can at once lower saturated fat in milk an cut cows‟ methane emissions. The University of Reading has produced a detailed research proposal focused on farm trials with commercial herds. Scientists want to see whether the results can be sustainably replicated in herds with different dietary backgrounds. Other areas include analytical methods for key fatty acids, leading to the possibility that payment systems could be built round unsaturated fat, rather than total fat. The project will also examine whether the modified milk products provide health and disease benefits reduction to consumers. The Diet and Health Research Industry Club will decide whether or not to fund the project. Disaster planning strategy moves a step nearer completion Dairy UK made progress this week with plans to finalise a major incident strategy for the industry. A small working group of operations managers from the dairy companies met to discuss the draft strategy, which is being drawn up to deal with potential crises that affect the industry‟s ability to supply its customers with product. Dairy UK is seeking advice from an external crisis simulator about testing the strategy. And partners such as Defra and the NFU will also be contacted in due course, so that the strategies link up across the food chain. Major incidents do not include issues that have an impact on a single dairy company or site. The next meeting of the group will take place on 8 February. Dairy UK‟s Communications Group will also be asked to comment on the document in the New Year. Cornish convenience store crowned UK’s top shop Spar Pelynt has been named the UK‟s top shop at the Robert Wiseman Dairies neighbourhood shop of the year awards last night (10 December). The family business has been run by generations of the Boxall family for 80 years and Fernley and Molly Boxall have run the store near Looe, Cornwall for over 40 years, with help from their son Paul and his wife Sophie (pictured). They impressed judges with their mix of excellent convenience retailing, services to the community and forward thinking. Sandy Wilkie, Wiseman, Sales and Marketing Director said: "In the current economic climate convenience stores are a key factor in maintaining the local economy as well playing a major part in their community.”
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Dairy UK responds to Defra’s consultation on resilience and competitiveness Disease risks, price volatility and regulatory burdens are the biggest challenges to industry resilience, Dairy UK said this week. Responding to Defra‟s consultation on the resilience and competitiveness of agriculture, we also argued that technology, skilled labour and improved industry structure are the main drivers of dairy industry competitiveness. All these issues needed to be addressed with an appropriate balance. The online consultation closes on 23 December, but it is not clear what changes in Defra‟s policy and practice can be expected. Dairy UK took the opportunity to reiterate key messages about the dairy sector. Dairy UK advises Devon County Council on prospects for dairying Dairy UK briefed Devon County Council on the prospects for the dairy sector this week as the council considers the future for its dairy tenants. Policy Director Peter Dawson travelled to Exeter for the interview with the panel responsible for advising the council on what to do with its extensive dairy farming estate. Dawson argued that UK dairy farmers could expect to be competitive in the future. He drew on analysis in the recent report Investment Prospects for British Dairy Farmers, jointly published by Dairy UK and DairyCo earlier this year. Devon‟s review will be completed by March. RUMA rocked by the departure of its Director Tony Andrews has resigned as Director of the Responsible Use of Medicine in Agriculture Alliance, citing resource constraints. He said that he could „no longer fulfil the requirements and expectations of the organisation‟ with the resources available, and leaves RUMA on 31 December. Chairman Peter Allen described the move as a ”considerable blow” personally and said that interim arrangements were being made until the board could consider options in February. He promised specific recommendations on 2 March. Milk protein may aid bone building Milk proteins may enhance the activity of bone-building cells, stimulating bone tissue development, according to a recent study published in the journal Peptides. Milk proteins have previously been shown to help repair damaged teeth by binding and securing calcium to the teeth. But this is the first study to assess the effect of milk proteins on the activity of human bone-building cells and their ability to take up calcium, which is essential for the production and maintenance of strong bones. For further information or nutrition advice relating to dairy, please visit The Dairy Council‟s website: www.milk.co.uk. Alternatively contact us at info@dairycouncil.org.uk or 020 7467 2629. Dairy UK members tour Duchy College Dairy UK members in the southwest had a tour and briefing this week at Duchy College, Cornwall. As well as the commercial dairy at the college, there is a whole range of support and training on offer for small businesses. These range from food manufacturing qualifications to vocational training for dairy farmers and membership of the Food Innovation Service. The visit was organised by Dairy UK‟s Regional Services team.
Economy and world markets
Tetra Pak report forecasts increase in dairy consumption Global consumption of milk and other liquid dairy products is expected to grow by 1.3% during 2009, according to the latest Tetra Pak Dairy Index, which monitors of global dairy trends. Total consumption is forecast to rise from 259 to 263 billion litres. Much of this growth will be led by developing markets, driven by population growth, rising incomes and the relative novelty of liquid dairy products. A key growth area is long life liquid dairy products, spurred on by a general trend towards, convenience, lower prices and a growth in flavoured milks.
UK Wholesale Milk Deliveries (million litres) 1,300 1,200 1,100 1,000 900 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
November milk deliveries slightly up on 2008 Provisional figures issued by the Rural Payments Agency this week show that UK wholesale milk deliveries during November were 3.8 million litres (0.4%) above last year. Over the first eight months of the milk year, deliveries are now only 1.2 million litres below the same period in 2008. Within the UK total, however, there are large variations between the different regions. Mainland British deliveries up by 1.3% for the year to date but these have been offset by a 7.4% drop in Northern Ireland deliveries over the same period.
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UK dairy imports fall in first nine months of year Figures issued this week show that both UK cheese and butter exports from January to September were considerably higher than in 2008 (by 17.6% and 69.0% respectively). All cheese categories showed increases with most of the growth being accounted for by increased trade to EU destinations. Cheddar imports for the year to September were 3.5% down to 96,020 tonnes and speciality cheese imports also showed a 3.4% drop, with reduced volumes from France, Ireland and Italy being offset by increased imports from Denmark. Butter imports were 1.9% down over the same period. European milk prices rise for sixth consecutive month Farm gate milk prices in the EU have risen for the sixth month in a row. The International Milk Price Review for October issued by LTO (the Dutch Organisation for Agriculture and Horticulture) show that the average price recorded rose 1.2% in October to hit €27.06/100kg. Dutch, German, Irish and Belgian prices rose, but French and British prices slipped. Despite recent rises, prices remain considerably below the levels of the previous two years. Rabobank report shows positive medium term outlook A new global dairy report from Rabobank Australia predicts gradual improvements through 2010 before a more robust market emerges in 2011, according to press reports. Rabobank says that a “brutal chapter in the history of the global dairy industry appears to have drawn to a close” as the market emerges from a “phenomenal” boom/bust cycle. The year ahead is expected to produce modest demand improvement and small reductions in exportable supply. Beyond 2010, the market is expected to return to stronger rates of demand growth, driven by rising incomes, population growth and urbanisation. Volatility in dairy prices will remain a factor over the long-term.
Currency watch Sterling ended the week down against both the dollar and euro after trading within a narrow band all week. It hit a six-week low against the dollar earlier in the week, as traders prepared for the UK pre-budget report, and a heavy fall in the value of RBS shares also added to uncertainty. Concerns about public finances should keep sterling under pressure.
£1 = € 1.115 1.110 1.105 1.100 1.095 1.090 1.085 1.080 30 1 Dec 2 Dec 3 Dec 4 Dec Nov
£1 = $ 1.67 1.66 1.65 1.64 1.63 1.62 30 Nov
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DGs blog
The perennial dilemma for a lobbyist is whether you win more with a clenched fist or with a velvet glove. The choice of style is always deliberate for a lobbyist. It should never be a personality thing. This week I sat within the hallowed portals of DG-Agri and watched EU farmer after farmer crucify... well, let‟s say, lambast, an EU Commission official. His crime had been to explain the rationale behind the Commission‟s €300m hardship gift, which the farmers will probably be able to use to buy their chocolate bunnies next Easter. The Commission official might have expected the farmers to have said, erm, thank you. Instead, he got a load of snash. Eventually he snapped. “My officials work 12 hours a day in your interests,” he said. “More than 90% of the money we pay now comes straight to you, and not through an intermediary. There are 500 million EU taxpayers who would be interested now in what‟s coming out of your mouths!” Phew! Later on I met him in the corridor. I offered him a tranquilliser, but he settled for a calming Proud of Dairy badge. At Dairy UK, we‟ve used a variety of styles over the years to get our point across. Always, the subject is discussed in advance and a decision taken. Seldom is there universal agreement. The terriers amongst us want to go for the jugular using the media. The scientists and intellectuals want “the correct” approach and cannot stomach us praising our targets when we know for sure that they are scientifically wrong. For them, there is only one solution. And then there‟re the pussycats. They always want to cuddle. I, as you would expect, always lead the pussycat faction at Dairy UK, and I‟ll remain in this position until all the awkward soothsayers bandits and charlatans that we sometimes deal with see it our way (purr, purr) When the pussycats win an argument at Dairy UK, the scientists and intellectuals shudder, and the eyes of the terriers scream “wimp”. So please consider me in pussycat mode as you read the rest of this blog. I wonder whose bright idea it was to unveil a cut in the Climate Change Levy discount that businesses can claim from the Government during the week of the Copenhagen Climate Change Conference. Our man, Fergus the Green, in Copenhagen for the summit, is now called Fergus the Purple. The stimulus to UK dairy companies from this tax concession has seen
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them reduce carbon emissions by 130,000 tonnes, while world leading dairy plants are built. So, if the Government wants this to continue, this is wholly the wrong signal. Today, clearly linked to the agricultural debate in Copenhagen, we have the Sustainable Development Commission calling pointedly for reduced dairy consumption. Their report displays a bias that we have come to associate with the City University. Of course we will challenge it but we must do so with science and information, which we are building up progressively. I don‟t believe the Government will heed this report. They have demonstrated in the past ultra caution when very similar work from City University is promoted to them, but we must keep the flow of information going. I urge those of you who are sitting out there with unpublished research – and you know who you are – to get the information into the public domain as quickly as possible. Otherwise, the City Universities of this world could win. The Wiseman Neighbourhood Shop of the Year Award was a subdued affair this year. That is the official company line and I am authorised to deliver it. All we had to entertain us were choirs, a gaggle of water nymphs, a Las Vegas street artist, a talking cow, a flotilla of pipers, a cacophony of fireworks, a recreation of the “American in Paris” film set, and a cluster of performing nuns. That‟s all, and absolutely nothing else. On the night, the generous audience collected £45,000 for charity and for me, a new unsung hero emerged. The Great Scot‟s Bar in the Cameron House Hotel on the banks of Loch Lomond has a truly evocative atmosphere; it‟s steeped in history and it‟s where the “Boozegate Affair” involving the Scottish national football team took place. But in truth, it‟s so busy that a man can almost die of thirst while waiting to be served. They say that cometh the hour, cometh the man, so step forward this week‟s winner of the J Begg “Life is All About Timing” award: Charlie Faulkner of RWD. He swooped down from a packed throng like a condor from the High Andes just at that second when the barmaid looked up to dismiss and reject her next victim. Moments later, the combined leadership of the Dairy UK/Dairy Council and PTF had satisfied smiles on their faces. You can‟t buy talent like that. A winner for sure!
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