Milk
Work remains busy and my blog continues to be neglected. I have missed a week and shared lots of writing by other people (which I like) but still. so this week, back to some original writing by me.
This week I have been researching why the price of milk is falling and why UK dairy producers are going out of business. In addition to this I have been reading a brilliant book called Wilding where an ex-dairy farmer is talking about a herd now kept wild, roaming in land left to go feral in a ‘leave it alone’ approach to nature.
Milk. The 1970s
Before getting into that I have thought back to my childhood and what milk was like then. My parents would have a metal basket that could hold 4 glass milk bottles. On the front of it was a dial that you could turn from 0 to 4. They left this on the doorstep each night saying how many bottles of milk they wanted along with the washed empty bottles from previous days.
Sometime between 4am and 6am an electric vehicle carrying milk in glass bottles (and also orange juice and eggs) would come into the street. No engine noise but clanking of bottles might be heard if you were awake. The milkman would take the empties for reuse and leave the number of fresh bottles in the basket, recording that to your account to be settled at a later date. These electric floats used to cover each area based from their depot where they charged overnight.
Just think about how ahead of their time these two aspects were. Glass bottles being re-used and re-cycled numerous times. Electric zero emission vehicles covering every street in a community. Something even Amazon, one of the largest and richest companies in the world cannot achieve 50 years later.
Imagine if that still existed. Amazon and other deliveries could be taken to the depot and delivered into local communities by a fleet of electric vehicles but local people who actually knew who lived where. The infrastructure was already there, and these depot owners, perhaps the dairy farmers could have a stream of income charging Amazon and Deliveroo for delivering their stuff.
The milk in the bottles, you’d think it was the same as what we buy from supermarkets now, but it wasn’t. It tasted different and it presented differently as well. The cream would clot around the top and you had to shake it before using it to mix the cream in. Supermarket milk doesn’t do this due to additional manufacturing processes (homogenisation) which is done to make the product look ‘nicer’ in our fridge. Supermarkets would claim that this is what consumers wanted, but I can’t recall the big rebellion against cream in milk.
Milk in the 1980s
In 1980 when, I was 8, 89% of British households had their milk delivered to the doorstep. 20 years later that had dropped to 3.2%.
Instead we now have the ‘convenience’ of the supermarket. A large shop we could burn petrol and drive to where the quality of our food seems to have dropped from the local baker, butcher, fishmonger and green grocer. Over this same time an obesity crisis has escalated, healthcare costs have skyrocketed, and pharmaceutical companies make millions of pounds from selling drugs to make fat people feel better.
The Milk Marketing Board (MMB)
As we know, during the 1980s Thatcher started a process of privatisation and de-regulation. These are things which in the neoliberal economic textbooks are good things, and its true that to some extend, elements of private ownership and less regulation, in some instances has proven to be good.
As we know from our experience today, there are plenty of areas where public ownership, public production and regulation are very necessary, although we’ve currently lost sight of that. But I’m digressing.
Until 1994 the MMB set a minimum price to be paid for milk, protecting farmers from free market pressures where prices are driven down. It also had in place things like standard tanker costs so a small but excellent producer in the Scottish highlands paid the same for collection as a large intensive farm in Surrey.
Thatcher abolished it, exposing British dairy farms to more internal, and ultimately global competition, something Guardian journalist Zoe Williams describes in this article as “One of those Thatcher depth charges, destined to detonate 30 years down the line.”
Milk Today
So thats the backdrop, back to the price of milk in the UK. All I have read is that supermarkets are driving the price of milk paid to farmers down. Its being driven down to the extent where farmers claim that there is little to no profit being made by them.
We also know that for farmers, the cost of diesel fuel, the cost of their electric, the cost of grain purchased is all increasing. So their costs must be rising along with everyone elses.
If we take this back to the basic economics we are all told, this must come down to oversupply when compared with demand. When there is too much supply, the consumer (the supermarket) can demand lower prices. The so called ‘invisible hand’ of the market at work.
What happens in this event is that smaller, less efficient farms go out of business, or change from dairy production. Larger farms invest in better technology and lower their cost per unit, which is exactly what the consumers want.
However, this is where I get stuck. Because what we’re saying is that there must be only 1 or 2 super dairy farms in the UK producing dairy at the lowest price possible in the UK. But we know that this still won’t be cheap enough because of global competition.
Lets say that our UK super farms produce milk at 30p per litre, but a farm in New Zealand can fly a litre of milk here for 20p, economic theory says that consumers will buy the cheaper milk. I get stuck at this point because I think that British consumers want British milk, but lets assume that they don’t and globalisation takes it course.
Basic economics says that British farmers have land and capital that can be better used for something that produces a better profit and they move into that new, more profitable industry, and thats the efficancy of the market, everyone is apparently better off in the economic textbook world.
But I get stuck because I don’t think British consumers want New Zealand milk. Yes, they may demand (to some extent) cheap British milk, but not foreign milk. So when McDonalds say “we use British milk” it’s because that appeals to the British consumer, and McDonalds then demand cheaper prices, surely there gets a point where British farms can say ‘we can’t produce cheaper than New Zealand milk’ so you have to buy the milk at the price you want from New Zealand. Do British consumers say… cheaper milk in the supermarkets, cheaper Maccies, so fine? I’m not sure they do, otherwise why does McDonalds today make a big selling point out of their milk being British? On the other hand, perhaps it’s not me that’s the consumer here, perhaps it’s the supermarkets and there will come a day when they say, ’cheap milk from New Zealand is what we want’. And we buy it.
Lets stick with pure economics and assume that globally, the supply of milk is plentiful as it must be because the prices are being driven down. British farmers are complaining that they cannot cover their costs with the price they are being paid, so it must mean that international milk is cheaper than British.
The end result of this is that British dairy farms need to all go out of business and do something more profitable. We have satisfied economic theory, but is that all that needs to be satisfied?
What is the ultimate efficient British dairy farm? This single herd that supplies all milk at the cheapest cost possible in Britain. We can ignore fuel and electric costs, the farm cannot determine those. So what does the economic textbook approach drive us to do?
Shed.
Letting cattle roam and gathering them up costs money, we can cut that out by keeping them inside. Shed conditions will increase the methane produced, so I will incur costs on ventilation, but its just a single shed with thousands of cattle in.
Feed
Feed must be the lowest quality (cost) possible per element of nutrition. If we take a human example, how can you fatten a human up as much as quickly? Feeding them lard coated with sugar is probably the best thing. Cheap feed produces more greenhouse gases, but I can just release that into the atmosphere to save money on any expense air cleaning.
The lard coated with sugar equivalent for a cow is soya. The best supply of this will probably come from South America where a nice bit of rain forest has been cut down to grow it.
Slurry
The shit from my herd in the shed will be vast. But I will put the shed next to a river and have internal channels that allow the shit to flow directly into the river at zero cost to me. That’s the most efficient way.
Antibiotics
I need these cows to survive without illness. They will be prone to illness being stuck in a shed with thousands of other cattle shitting, so I fill them with every preventative medicine I can.
Abduction and Abortion
There is growing evidence that female cows feel the loss of their young as much as any human mother. Anyway, that doesn’t help me make a profit, so keep them pregnant, abort their young or take them away immediately. I can probably kill the babies and sell the males for glue. Females will be put into a pen, fattened and impregnated.
I now have the ultimate intensive farm. There is nothing else I can do to reduce the cost of my milk production.
And what has happened to all those smaller family run farms along with the skills, knowledge and environmental concern they had? They’ve found something more profitable, probably got a job selling credit default swaps for massive profits in the city of London, benefitting absolutely no one but themselves and eventually bringing down the global economy. And the farm land? Perhaps they’ve concreted over their farm for housing or to build a petrol station? (The market likes credit default swaps better than saving the planet. There is no money is saving the planet.)
I digress again.
I can’t think of much else under my control but its incredible to think that even if I took this approach, milk can be flown in from New Zealand cheaper. Perhaps their herds are even kept in better, more expensive conditions and I still can’t beat them on price. Incredible.
Perhaps this shows that there is something wrong with how we measure costs? If the cost of the damage to the environment, cattle, lost farms and farmers, environmental costs were factored in, perhaps my super farm is no longer the cheapest. But the way we currently do our accounting, its the best.
But I think there is a point at which British consumers don’t want just the economic textbook milk. The British public is starting to say that they don’t like the methane gas produced as a result of dairy. This gas can be reduced if the cows are fed and kept in a much more natural state.
Milk can be produced without taking the young away from their mothers, yes it gets more expensive, but people are starting to feel uncomfortable about this aspect of dairy.
The organic milk industry is well established and shows that people are prepared to pay a premium for a label that seems to stand for something better than intensive dairy farming. Perhaps the next step is free grazing milk, milk produced from herds that roam land free, eating natural grasses and not pumped with cheap feed.
All of this shows that sometimes, regulation, such as changing how costs are accounted for, or by setting in place certain standards are needed. It also highlights that we do not learn lessons from the past.
Britain has been losing its farms and farming knowledge before. In the 1940’s this problem hit home when the island was blockaded by the Germans and we were already not producing enough of our own food to feed everyone. Britain had to dig for victory, it had to produce enough food so that its population did not starve. But digging for victory is only possible if you have farms and farmers who can share knowledge with an army of land girls who can dig.
Dig for Victory was a specific government policy. Abolishing the MMB was a specific government policy. Allowing global market forces to apply to our dairy farms is a specific neoliberal government policy.
It doesn’t have to be this way. We lose our farms at our peril. We could instead, choose an alternative where herd welfare is prioritised, grazing and roaming is possible, where manufacturing processes are minimised. Where the health of animals and of humans consuming their products is put first. It has always been my belief that while this may cost, it would also save more money in terms of human healthcare and environmental damage.
But instead we have governments who pursue economic textbook approaches rather than one which helps British people and the planet. Big business and the super rich have no interest in the health of the population or solving real issues for the long term.
And British dairy farming is just one of the many victims of current political and economic approach.
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