Hill farmer Gareth Wyn Jones explores the crisis facing the Welsh dairy industry. He discovers that farmers are selling their milk for less than it costs them to produce it.
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Milk - we pour it on our cereals and stick it in our tea.
In the UK, we consume over nine billion pints every year,
but have we forgotten where it comes from?
I don't think people really know how much work goes into
getting milk onto that shelf.
Along with the dairy farms and cows that produce it,
milk has shaped our countryside and our way of life.
The dairy industry is just one piece of the jigsaw
within the whole countryside.
But now the industry is facing a crisis like never before.
This is the worst period I've seen in my working life.
Over the past 15 years, the number of dairy farmers
in Wales has halved.
On average, three farmers leave the industry every month.
It's an embarrassment on me, on myself, that I can't make it pay.
The traditional family dairy farm is in serious trouble.
There isn't a future for every dairy farmer.
Milk is now a global commodity and dairy is big business at the mercy
of the world markets.
Can Welsh farmers survive in this new cut-throat world?
There must be room for a small family farm.
My name is Gareth Wyn Jones.
I'm a hill farmer and campaigner for the best of Welsh food and farming.
Do you know how much you're paying for your milk?
I want to explore the dairy industry from the inside,
from the cow to the consumer
and from the farm to the supermarket shelf.
I want to see what it takes to satisfy our thirst for milk
and find out if there is a future for the Welsh dairy farmer.
If I'm going to understand how this industry works,
I need to start at the beginning - the farmer.
It is 5am on the north Wales coast
and this is Aber Ogwen Farm near Bangor.
It's a typical Welsh dairy farm, handed down through the generations.
The Owen family milks around 120 cows and today the herd
is looked after by my old friend Carwyn.
I've offered to give him a hand this morning,
but this is an early start even for me.
You don't get any better than this, this morning.
No. Living the dream, boy!
-Do we want to go and get this one?
-I'll shout on Bob if you will.
Cheaper than a quad bike.
-You don't have to pour petrol in him.
Nice to see a good working dog.
Well, I don't think he'd do well on One Man And His Dog, but...
North Wales may be known more for its hill farms than its dairy herds,
but I can remember when most farms were mixed.
Sheep were kept on the mountain and small milking herds
grazed the lowland pastures.
You can look down this coast, how many people milked here, Carwyn?
If you went 50 years, every farm milked, didn't they?
-And then you go back 20 years,
there's about eight gone here and there's only me left here now.
Carwyn's cows are milked twice a day, every day,
365 days a year.
But it's been a few years since I did a shift.
So you wipe each one of these now?
Yeah, just to make sure they're perfectly clean.
-So we do each one of them now?
Have you got any kickers?
Or are you not going to tell me?
We move on to this, Gareth.
The machine's on?
Swing it round and it will come on.
Oh, wow. OK. And then it's...
-Do you give it a little bit of a touch to say that we're here?
Still very early, the sun's just come up.
It's going to take us about two hours to milk these cows.
It's a job to be doing this every single day, seven days a week,
twice a day as well.
Carwyn's flying through these.
I'm struggling to keep up with him.
What's nice is you can hear him talking about every single cow
individually, he knows each one...
..and he has a real connection with them.
People like Carwyn are putting everything they believe
into these cows and into these parlours, just to make a living.
It's not for everyone. I don't think it would be for me.
It's not the easiest way to make a living.
It's not just the cows that Carwyn is investing his time in.
He's training his 15-year-old son Gwion to milk the family herd.
THEY SPEAK WELSH
-All natural, there.
It's really nice, you know, watching Gwion here with his dad.
This is what family farms are about,
passing on that knowledge year in, year out.
It's a way of life that people...
..need to see.
With all the cows milked, they return to the fields.
And with the parlour washed down, my shift is over.
Carwyn and Gwion though will soon be back to do it all again.
I don't think people understand how much time and how much commitment
goes to having milk on their cornflakes and in their tea.
Cows need to be milked twice a day.
You can't hide, you know. If Carwyn doesn't feel well,
he has still got to get up and he has still got to do these.
You've got to think that seven days a week, there's no hiding,
there's nowhere to go.
Welsh daily farms like this are in serious decline.
Over the past decade,
there's been a steady trickle of farmers leaving the industry.
The roots of the current crisis are complex.
But, put very simply, there's too much milk in the world.
When prices were high a few years ago,
milk producers across the globe increased their herds,
flooding the market with cheap milk.
The price crashed.
Small Welsh farms can't cope with this roller-coaster global market
and are now struggling to ride out the bad times.
At the same time, supermarkets engaged in a ruthless price war.
They use staple household items as loss leaders and slashed
the price of milk.
Many dairy producers feel that this has devalued milk in the eyes
of the consumer.
For Welsh dairy farmers, it's a perfect storm.
This is the Royal Welsh Show,
the biggest agricultural event in Europe.
Farmers and their families come from all of the country to showcase
the best produce and livestock that Wales has to offer.
If I want to gauge the state of the dairy industry today,
then this is the place to be.
And behind the parades and prizes, many farmers are angry.
I'll tell you on camera, we lost £60,000 in money last year.
You lost £60,000?
-How was that?
The price of milk.
16.8 pence a litre I had on my last milk check.
-Is that not enough?
-No, not from 16.8.
The cost of production is 25.
You don't have to be a rocket scientist to work that out.
So you're producing something and losing money every day?
-That's not a good businessman.
I know. If you were a businessman, you'd sell up.
Water is worth more than milk -
that doesn't make sense because that cow has got to drink water to
produce milk. All we want is a fair price, you know, and as it is now,
we're not having it. Far from it.
It's the summer of 2016.
The average price paid for milk is down to 18p a litre.
But with the average cost of production at 24p a litre,
many farmers are losing 6p on every litre they produce.
It's frightening, really,
what has happened to agriculture in the past 12 months.
When you've got milk price at 16 or 18p,
it doesn't give you a very bright future.
A few years ago, the milk price was up at 30p a litre.
When times were good,
many farmers borrowed heavily and grew their herds and farms.
We have spent 1.8 million...
..on our new set-up.
As it is now, the products we sell are so devalued
we would never pay it back...
as the price of milk as it is now.
If you have another two years or another year of this,
where will you be?
Oh, we can't carry on.
We need the industry to survive and at the moment it's not.
I don't think I've ever heard so many farmers being so open
about their finances and how they feel about the industry.
These people are losing money every single day of the week.
They're hurting and frustrated.
Passionate about what they do but not getting any reward.
And to me, a lot of these guys,
they're not going to be able to survive another 12 months.
This industry is in dire straits and something needs to happen.
Not that long ago, the way we got our milk was simple and local.
Dairy farmers supplied milk to lots of small local creameries and the
milkman brought milk to our doors.
In the last 20 years, our food chains have become far more complex.
Now the dairy industry is dominated by a couple of big processors
and a handful of big retailers.
The balance of power in the milk supply chain lies not with the farmers,
but with the big corporations.
And the gap between the farmer and your fridge is greater
than ever before.
I think people have lost contact of how milk is produced.
Dairy farmers are in the front line, you know.
They're the ones that are bringing it for us to pour on our cornflakes,
pour in our tea, and we don't see that side of it.
You know, probably the closest we get is when we walk
into a supermarket and when we grab that pinta.
I think we need to ask the question to ourselves,
as somebody that drinks a lot of milk, are we paying enough?
I want to find out more about the milk on supermarket shelves,
so I'm off to do a bit of shopping.
Yes. So we're just arriving at the first supermarket in Bangor.
We're going to do a bit of shopping in Tesco.
Slightly against the grain.
Well, one down, many more to go.
Supermarket number two, Morrisons.
The cheapest one yet.
These supermarkets are just like factories,
people are just in and out and in and out.
Just don't seem to think how much grip they've got.
Next one - Lidl.
I just can't believe how many choices of the same thing there is
because it's all milk but sold in different kinds of packaging,
for different kinds of prices.
What's it all about?
To make sense of all this white stuff, I'm going to need some help.
So who better than the National Farmers Union's chief dairy adviser,
I'm hoping she can tell me more about how the supermarkets
source their milk.
So tell me a little bit about these five then, Sian.
So these five retailers all pay the farmers a cost production price.
So the retailer works with their farming group to work out the average cost production
for the group and then they pay those farmers above that
cost of production. For example, Tesco here
has around 800 farmers supplying them and they work with that group
of farmers to work out their average cost of production and then they
would review that cost every six months and pay above that price.
Only around 15% of British dairy farmers
are on this sort of contract.
A few of the other retailers have taken a different approach.
So I got this one from Asda and this says an extra 25p.
Now, this is part of a minimum price scheme.
The retail price has gone up by 25p a bottle.
The consumer chooses to pay more for this milk and they are guaranteed
that extra money goes back to the farm.
This scheme has been introduced by Arla, one of the biggest processors,
a Europe-wide farmer-owned cooperative
with over 13,000 members.
That 25p goes back to the farmer?
25p - it won't be going to a farmer.
It won't be going to the farm down the road,
it will be shared in the pot across Europe.
I think some of the supermarkets
are paying a good price to some of the farmers.
There is a few really good schemes,
where the farmer is going to benefit,
but it's not really a fair playing field.
The majority are not having a fair slice of the cake.
Only a fraction of Welsh dairy farmers
will benefit from the supermarket schemes.
Many are at the mercy of a volatile, wider industry.
I've travelled to Powys to meet a second-generation dairy farmer
who's been struggling to make ends meet.
-Are you well?
-Yeah, thanks for the invitation.
Ian Gethin's family has built up their herd over the past 50 years
but now he's decided to sell his cows.
These are the last ones going today.
It's a massive decision cos that's all I've always done and loved.
But it's a lifetime of work, really,
you've been breeding what suits your farm.
And it's a pity they've got to go,
but that seems to be the way it is going.
At the end of the day,
if the milk price isn't there, you just cannot do it.
For Ian, like most good farmers, this is much more than a business.
These cows mean the world to him
but, in the end, everything comes down to the finances.
What's your cost of production here, is it pretty low?
-And your milk price is?
14 we were offered on the 1st of April.
So that's 10p under what you can produce it for.
So, as a businessman, that's a no-brainer, isn't it?
Yes. It doesn't take much working out, does it? You don't need a calculator for that.
No, you're right there.
Having done this twice a day almost every day since he was 12 years old,
this will be the last time Ian will milk his cows.
Come on, girl.
It will be a different day for you tomorrow.
No. This time last January we were milking 120 through here...
..as we have been doing the last few years.
But you were losing money every single month.
Yes. Yeah, we were losing up to...
The last couple of months of milking, £3,000 a month.
I was working for nothing and I was working to lose money, which is...
That had to be soul destroying?
Yes, it is.
The last 18 months, really, what's happened with the milk price and...
You always get quite attached and proud of your own cows.
Had you hoped one day that you would be passing this on
-to little Harry here?
Very much so. Same as my father's handed over to me, really.
And you can keep gambling for a few years and hope it will come right,
but at the moment I don't see the future there.
Yeah, it is very disheartening,
but...it's got to be done.
I hear this at farm after farm.
The responsibility to pass it on, not to let people down,
not to be the one who fails.
It's difficult, really, to understand how much pressure
is on this family.
There's a lot of emotion
and I don't think he's taken this decision lightly.
Ian has been selling his herd gradually over the past six months.
This will be the last batch sent for auction.
He and his family are now the latest casualty of an increasingly
challenging and unforgiving industry.
They won't be the last.
With farming you've got decisions every day,
but you've just got to sort of work it out really whether...
Is it the right thing to do?
My heart says stick at it, but my head says get out
because at the moment I don't see the future there.
You never could believe that this day would come when...?
No, no. You always think you will get a contract around the corner.
Where do you think the blame lies with the whole industry, Ian?
It's very difficult. You can blame lots of people,
but at the end of the day it's got to be the supermarket buying power...
..because they are selling milk as a loss leader.
They say they're not passing it back to the farmers,
but they obviously are devaluing the product.
Ian's cows are going to Cheshire and will be sold at one of the biggest
dairy cattle sales in Britain, the Beeston Castle Auction.
Around 500 cows will be sold at the market today,
with buyers and sellers coming from as far afield as Kent and Scotland.
Ian plans to build up a herd of beef cattle, so the money he receives
for his cows will be vital for the future of the family farm.
Big day for you today.
Yes, it is.
Yeah, no, a bit nervous before selling them.
-You don't know what trade you'll have on the day.
If he doesn't get a good price, or if the cows don't sell at all,
it could jeopardise his hopes of rebuilding his business.
Ian is going round now talking to people, saying what the best points
of his cattle are. It gets me a little bit that, you know,
that's it. That's it finished after all the time and all he put into it.
It comes to an end here, today, right now.
As the auction gets underway, bids come flying in.
This is Ian's first cow in the ring, number 24.
Ian is up in the box.
50, 80, 1,220, 50, 80. 1,280 I'm bid.
1,280 I'm bid now. 1,280...
Ian has got a £10 note in his hand and that's luck money.
Every cow he sells, he gives that £10 to the buyer
and it is an old tradition.
In the end, all of Ian's cows have sold.
His days in the dairy industry may be over,
but at least he's still got a future in farming.
It's been so nice to see Ian having a fair price
for his cattle here today.
He can take that money home now and reinvest it
in the family farm.
Ian's story is far from unique.
He's one of the many farmers to have left dairy in recent years.
Auctioneer Clive Norbury has seen the challenges facing the industry.
Well, I'm in my 42nd year of work
and, yes, I've seen massive changes.
There were 35,000 milk producers when I started my work.
Now we're down to around between 9,000 and 9,500,
which is a colossal change.
This is the worst period I have seen in my working life.
Not only for the milk producers,
but the hundreds of people that hang on a cow's tail -
and there's hundreds of us. You know, it's affected everybody.
The dairy industry is just one piece of the jigsaw within
the whole community of farming, countryside.
The knock-on effect on the dairy boys going out must be hitting
the smaller businesses that sell to these guys.
I think we need to look at how we can help the smaller family farms
because, you take them out of the equation, we will lose something
in what is cefn gwlad,
what is the countryside,
and that is the traditional small family farm.
So we won't see these patchwork fields
and these black-and-white cows dotted around - they will be gone.
I think it's about time we did something about this crisis
and took the message to the masses.
The only people I haven't chatted with yet are the consumers.
Do they really know how much work goes into getting milk
onto that supermarket shelf?
I don't think they do.
I want to find out what the great Welsh public really know about
their milk, so I'm off to see a man about a cow.
I've come to Anglesey to meet award-winning breeder Euan Hughes.
You and your family built this herd over many generations.
Yes, yes, I'm the third generation.
My grandfather started it all off.
That must be something that you feel really proud about.
Oh, I'm very proud, I'm very passionate.
That's my biggest fault as a businessman -
I'm a sentimental farmer. I love my cows.
Yeah. Is it a sad feeling that, when you're milking twice a day
and getting such a low price for what you do?
Well, for over two years now,
I've been selling milk cheaper than what I can produce it for.
Yeah. Lots in the business will say, "Get out,"
but you can't do it.
How can I turn around to my grandmother who's 94 to say,
"After all you and my grandfather have done,
"after all my parents have done, I can't make it pay"?
You know, it is embarrassment.
It feels like it is an embarrassment on me, on myself,
-that I can't make it pay.
-It's the passion and dedication that farmers
like Euan have for their work that I think we need to show to the public.
I have come up with a crazy idea
of taking a milking cow into Llandudno.
It is a crazy but good idea.
Euan has selected his finest cow, Maya,
but there's a catch.
-You want to take my cow to Llandudno...
-..you're going to have to wash her.
-That's all right with me.
-There you go.
THEY SPEAK WELSH
THEY SPEAK WELSH
I think I seen a car wash down the road there.
You sure it was a car wash, it wasn't a cow wash?
It will be now!
Do a lot of cow washing?
-Always a first, isn't it?
-Is it all right if I use the pressure washer?
Is it a special one or something?
With Maya washed, it's time to hit the streets of Llandudno.
And with a quick costume change...
A change of hats.
..I am ready to meet the people and I'm armed with ice-cold milk
and a megaphone. Come and try...
Got to switch it on first, haven't I?
Do you know where your milk comes from? Meet Maya the cow.
Come over and try some glorious ice-cold milk.
In return for a free glass,
I want to know how much people really know about the milk they buy.
Do you guys know how much a pint of milk costs?
Do you know how much?
Do you know how much you pay for your pint?
-Ask her, not me.
-Do you know how much you're paying for your milk?
Come over, have a chat.
So, do you know how much you pay for your milk?
No. Neither of you have got a clue?
It's about, um...
People are seriously confused about how much they pay.
They really don't know. I've had all kinds of different price ranges
and it's quite funny. What's really great to see is the number of people
taking an interest in Maya the cow
and taking the time to speak to Euan.
It's difficult for these guys, you know, because it's costing them more.
-More to produce it than...
-I've seen it on the news.
And a lot of people seem sympathetic to the challenges
facing dairy farmers and many think that milk is too cheap.
-Would you be willing to pay a little bit extra?
-I would. I would.
Definitely, without a shadow of a doubt.
Why not? Yeah. We are paying for everything extra, why not for milk?
I would pay £1.50 at least for four pints
if that meant people didn't get short-changed.
I'm going to give you a little bit more because
you've been so supportive.
Does a day like this give you a kind of hope and a feel-good factor?
Everybody you talk to about the problem of the price of milk,
they're interested in what we're saying.
-And they're all willing...
"Yeah, we would pay more for the milk."
It does make you feel better.
Today we brought the cow to the consumer and what we found out
was the consumer is more than willing to pay
that little bit extra for milk.
The dairy farmers are not in a good place,
they are not very happy with the price,
so this is a problem.
There's a problem in the middle and that's what I'm going to do next -
is find out what's going on.
Next time I find out how the UK's biggest supermarket
sources its milk.
Actually, every time you do buy our milk,
that money is going back to the farmer.
I see milk production on a massive scale.
The quantity is seriously mind-blowing.
And I visit some of the biggest dairy farms around.
This is milking in the 21st century.
Hill farmer Gareth Wyn Jones is on a mission to explore the crisis facing the Welsh dairy industry. Gareth discovers farmers selling their milk for less than it costs them to produce it, and recruits a very special cow to find out what the Welsh public really know about the milk they buy.