With moves afoot to address the mechanism by which milk price is set – intended to alleviate at least some of the concerns held by producers – Bright Maize business manager Charlie Dolphin looks back at the UK dairy sector over the years. He starts with the inception of the Milk Marketing Board – a time he describes as a gentler age – and highlights some of the more significant developments affecting the industry in the decades that followed.
In the next blog, Charlie will focus on the changes in husbandry, management and dairy cow performance over the same period.
Unfair contracts to supply milk have been a long-running problem for many British dairy farmers, with many arguing that the farmgate prices paid by supermarkets and processors are insufficient to cover production costs and enable a sustainable and healthy dairy industry.
New regulations intended to make milk supply contracts fairer and clearer were announced by the government at the Great Yorkshire Show in the summer. Contracts will have to define how prices are calculated and show new price calculations, allowing farmers to challenge errors, and future changes to contracts will require the agreement of farmers. An enforcement mechanism to make sure the regulations are followed is also promised. The changes come three years after the government consultation in 2020 and the NFU response has been positive, with NFU Dairy Board chair Michael Oakes calling them a “significant step forward”.
Full details are due to be revealed later in the year and their impact and effectiveness will be scrutinised carefully by many in the industry. They are only the latest attempt to solve a problem that dates back many years and flares up repeatedly. A memorable recent example is 2012 when there was widespread protests by farmers about farmgate prices under the banner SOS Dairy, leading to a reversal of price cuts and some modest price increases agreed by supermarkets.
As the old saying has it, there is very little new under the sun. The end of the First World War saw the start of many years of turmoil for the UK dairy industry due to low prices. Matters came to a head in 1932 during the Depression. Relations between farmers and processors deteriorated into what has been called “open war” and some farmers refused to supply milk to depots in the “milk strike”. Within a year, an entirely new scheme for selling and promoting milk was organised, agreed and implemented by the industry. The new Milk Marketing Board endured for over 60 years, and is fondly remembered by many if not all of us as a fair and stable system that enabled farmers to increase milk supply and modernise dairy farming.
The original Milk Marketing Board was owned and controlled by dairy farmers, with regular elections for the board of directors. Despite some initial opposition from the NFU leadership, over 96% of farmers voting approved the scheme in 1933. The vote was binding, so every dairy farmer in the country had to register with the Board, which controlled the contracts between farmers and buyers.
Each month separate prices for liquid and manufacturing milk were determined, and an average or ‘pool’ price was paid to farmers for the previous month’s supply. In 1933 there were over 141,000 registered dairy producers in Britain, and milk is a highly perishable product, so buyers were in a strong position to dictate unfair terms to smaller producers. By pooling their strength in a group, the Board enabled farmers to combat the superior power of the buyers and set their own price for their milk.
Is that fair? Modern competition law would tell us no, and fairness, like beauty, is perhaps decided in the eye of the beholder. At any rate, in its early days the system provided a greater degree of security for producers with wider national benefits through increased supply and higher milk quality due to improved testing and distribution.
As well as regulating dairy contracts, the Board also had other important roles in promoting new farming techniques, and marketing milk and dairy products. In 1944 the Ministry of Food gave the Board responsibility for encouraging artificial insemination, and by 1951 every dairy farmer had access to the new technique through a comprehensive nationwide scheme. This was a world first, and by 1960 80% of UK cows were impregnated in this way.
Another early success was the Board’s involvement in the Milk in Schools programme from 1933, which it subsidised. This provided free milk for primary school children in order to improve nutrition and child development at a time of great hardship. It won new friends for the Board, and helped anchor milk in the public mind as a key part of a healthy diet. Sir Winston Churchill, registered with the Milk Marketing Board through his estate at Chartwell, Kent, went so far as to declare: “There is no finer investment for any community than putting milk into babies.”
Milk in Schools was later extended to cover secondary school pupils. When the Heath government decided to remove universal free milk for school children, the then Education Secretary Margaret Thatcher was blamed and taunted as “Thatcher, Thatcher, Milk Snatcher”. In fact, she was uncomfortable with the cuts and fought to retain free milk for nursery and primary school children.
The Board was also involved in milk and dairy processing, latterly through a separate arm, Dairy Crest. Products and brands developed included Lymeswold cheese, Country Life butter, and Cathedral City cheddar cheese. The Board popularised the Ploughman’s Lunch as a wholesome meal in order to encourage cheese consumption.
Marketing milk to the general public became an important part of the Board’s work. They ran frequent advertising campaigns, with slogans that older readers may recall: “full of natural goodness”, “is your man getting enough?”, “milk’s gotta lotta bottle” , and “drinka pinta milka day”. One of the most famous adverts comes from the 1980s, “Accrington Stanley, Who Are They?”. A young Liverpool fan tells his friend that the striker Ian Rush says if he doesn’t drink milk, he will only be good enough to play for Accrington Stanley, prompting the question of the title, and a battle to get the milk. The Board also sponsored the Milk Race Tour of Britain cycle race, and the Football League Cup or Milk Cup in the 1980s.
Britain’s membership of the European Economic Community (as was) from 1973, changes to the structure of the dairy industry and increasing political emphasis on free markets all put pressure on the Board. By 1994, the government had lost patience and the Board was wound up, with eligible farmers receiving shares in the successor enterprises Milk Marque, Genus, Dairy Crest and National Milk Records. Milk Marque was a co-operative milk marketing organisation that controlled over half the market, but it was split up in 2000 by the Mergers and Monopolies Commission into 3 regional companies which no longer played a dominant role.
The Milk Marketing Board was an organisation of a different era, revolutionary in its day but unable to survive in the modern world. For many dairy farmers it stirs nostalgia for a more stable and gentler age. As we await the details of the government’s new plans for dairy contracts, it is worth considering what lessons we can learn from history. In the words of Churchill once again: “The longer you can look back, the farther you can look forward.”