Welsh dairy farmers are hoping an April 1 spoof might offer them a lifeline as the milk sector confronts a nightmare collapse in prices.
A mock advert published on social media by Calon Wen featured the launch of the organic co-operative’s latest product, Bulls Milk.
Billed as a new energy and protein drink, it was given the tagline: “Who needs wings when Bulls Milk can give you the horn.”
The stunt was intended as a bit of light relief as Calon Wen members grapple with plunging milk prices brought on by the coronavirus pandemic.
Managing director Dai Miles warned some dairy farmers could start “pouring milk down the drain” within days.
Calon Wen’s spoof advert attracted 140,000 likes on Facebook and, while few people were fooled, Mr Miles hopes this can be translated into retail sales.
“If everyone who liked the advert bought just half-a-litre of our milk each day, we’d be in a much happier position,” he said.
Liquid milk prices have been hit by government covid-19 restrictions at a time when the spring flush is set to bring more milk onto the market.
Last month’s panic buying saw a spike in retail sales of milk but the subsequent squeeze on Britain’s foodservice sector, from schools to cafes and restaurants, has sent prices into a tailspin.
Even before the latest curbs, foodservice sales had plunged 70% in the first two weeks of March as consumers stayed away from pubs and cafes.
Global markets are also becoming more restricted due to shipping and isolation curbs.
As Calon Wen sales are focused on the foodservice sector, including Pret a Manger and Leon, it has been hit hard.
“We are having to sell our premium milk on the spot market, which is very depressing,” said Mr Miles.
“Our members would usually expect to receive a spring price of 32p per litre for their milk.
“Now we’re getting 20p-a-litre if we’re lucky – yesterday the spot price fell to 16-17p-a-litre.
“The whole dairy sector is in danger of collapsing. Without government intervention, dairy farmers will be forced to pour milk down the drain within days.”
Loss of customers, allied to delayed or cancelled payments, is having an serious impact on cash flows for foodservice suppliers.
As Calon Wen is run as a co-operative, it is the farmer members, rather than the business itself, who will feel the strain – especially as they produce a more expensive organic product.
Some Calon Wen products are available in shops and the co-operative hopes Welsh consumers will help out by buying locally.
Shifting milk supplies to the retail sector is not straightforward – and won’t be possible in all cases.
The alternative is spot sales, which will in turn put pressure on liquid milk processors who will have continuing milk supplies but fewer outlets.
Cheese prices are under less pressure and some processors may use surplus milk to manufacture products like cheese and butter that have longer shelf-lives.
In a letter to AMS and MPs, NFU Cymru president John Davies outlined his concerns.
He said: “The UK liquid milk market is equally split between the proportion of milk which goes into the retail sector and the proportion which goes into food service.
“The increased demand in the retail sector was not, unfortunately, sufficient to offset the decreased demand from the foodservice sector.
“Production cycles in agriculture are long and complex and cannot be adjusted quickly in response to rapidly changing demand, something which makes our sector especially exposed to such a volatile marketplace.”
To help ease cash flow pressures on farms, NFU Cymru is asking the Welsh Government to prioritise the delivery of all outstanding direct support and RDP payments to farmers.
The union is also seeking clarification on whether farm business can access the £100m Covid-19 Wales Business Loan Scheme.
The scheme is part of the Welsh Government’s £1.1bn package of extra support measures for businesses during the coronavirus crisis.
