Grass is Free so Milk should be cheap

Watching Midweek tonight with its emphasis on how households should cut their costs by spending less on food made me cross!  Conor Pope stated that there is no difference between various brands of milk apart from the inflated price of Avonmore milk, inferring that people should buy the cheaper milk. There was no mention of cutting out fizzy drinks or expensive snacks and crisps or ready meals (I saw an article in the Farmers Journal recently about ready meals – most of it isn’t food btw), no mention of replacing crap with fruit and no mention of the importance of calcium in a child’s diet. No mention of ‘”you are what you eat” and if you eat crap, you’ll be spending more money at the doctor’s surgery. €50 a pop for a doctor’s visit would pay for a lot of nutritious Avonmore milk.

Irish dairy heifers

No, according to Conor Pope, you must buy cheaper food because after all, as he inferred,  it is more or less free to produce it. After all, the farmer can produce his food for nothing. Grass grows naturally in the fields doesn’t it? Cows eat grass so it can’t cost much to produce the milk. The farmers are getting a CAP payment from Europe, why would they want a fair price for their milk?

Irish Cow

We are getting a good milk price this year but unfortunately most of it was gone before we got it. Remember that long winter – it cost us close to an extra €20,000 and we didn’t even have to buy fodder. That was the cost of the extra meal.

Grass doesn’t grow free in fields – it requires fertiliser, it requires topping, fields require re-seeding and drainage – it all comes at a cost. The grass has to be cut for winter fodder – that costs money. We gave our contractor €10,000 for cutting the first cut of silage, and we still owe him for the second cut – that’s not even counting the cost of the fertiliser that was spread to get the grass to grow. The cows have to stay indoors in the winter – the sheds they are in cost money to build and maintain. Eight years ago, we had to put in improve slurry storage – that cost €80,000.  Straw to bed the cows during the winter (and as feed for bulls and other cattle) – that cost €5,000 this year. AI to get the cows in calf, that will cost about €50 per head. I’m only providing a fraction of the fixed and variable costs here but you get the idea.

Some time ago, I was asked about the possibility of antibiotics in our milk or meat (produced in Ireland) and I was horrified. I couldn’t believe that people thought there might be a risk and I addressed it in this post.  That comes at a cost too – if an animal is poorly and is given an injection – he can’t be slaughtered for human consumption within the withdrawal period. If he gets steadily worse and it looks like he’s not going to pull through, he goes to the abbattoir – not the factory!   Apart from the fact a sick animal wouldn’t be fit for human consumption, the fact he has had antibiotics in his system would render him unfit anyway. That’s a cost to the farmer – where’s there is life there is death and the farmer carries the cost. If a cow dies, it costs the farmer €200 to have her disposed of. That’s a significant amount of money when added to the loss of the cow. That has to be built into the cost of your breakfast milk.

Irish Dairy Cow

The next time you look at a 4 litre container of Dunnes or Tesco milk and you look at the price and you compare it to the price of a container of Avonmore milk – think of the farmer who produced that milk. I don’t know why the supermarket milk is cheaper, I don’t know who they source it from, I don’t know if they apply the same stringent tests to it that Avonmore do, I don’t know if they take a lesser margin but we couldn’t produce milk and sell it at less than we do without going under, and that is with the CAP payment. Our cows live happy healthy lives and produce good quality milk. We expect a fair price for it – no more no less and listening to people cribbing about the price of a pint of milk when they are probably spending money on fizzy drinks and cheap sweets is just ridiculous.

Somehow, it all smacks a lot of ‘They shoot horses don’t they?”

Buy Avonmore milk, ensure the health of your family is good and support Irish farmers. That’s all really 🙂

Update: 10/10/2013 – after a debate on twitter this morning, I think I need to add some more points to this.

According to Conor Pope, some of the brands such as Avonmore and Glenisk stock Tesco own brand milk, same cow, same milk. Glenisk claim they once did but no more – now it is totally different cows! My point is there is a point at which milk cannot be produced any cheaper. Maybe Tesco buy in bulk, sell huge amounts and probably take a lesser margin per litre. My problem with it is there will be people this morning looking at their breakfast milk and thinking it should cost less.  Neither Pope or the TV3 team used their intelligence to give the other side of the argument and look at what it costs to produce that litre of milk and what each stage of the production line gets out of it.

Why do consumers need cheap food? The programme also pointed to the essential purchase of a TV licence. Lots of people watching Midweek would have been watching it on a huge TV and are now going to limit their intake of milk because it should be cheaper.  The consumer demand for cheap food drove those profiteering from horsemeat earlier this year – do we really want to run that risk again?

33 thoughts on “Grass is Free so Milk should be cheap

  1. That is the best reality check I have seen in a long time. Will you invite Conor Pope to visit the farm. perhaps he would get to hug a cow, when he sees how well and healthy your cows are I have no doubt but that he will change his mind… I had 2 plastic bottles of milk in my fridge, when the fridge temperature got too low, the Tesco milk froze, but the Avonmore milk stayed liquid.. what does that say about the quality of the milk?

    • I honestly don’t know where Tesco milk is sourced from – someone on twitter is saying it is Glanbia under another name. I don’t know tbh and not sure I want to know.
      Just irked me that in suggestions for making savings that milk had to be attacked – no mention of the crap convenience food such as plastic cheese like the stringfellow things or fizzy drinks or fruit juice that affects their teeth and costs money at the dentist. Grrr.
      Maybe they wanted a reaction – but there would have been people sitting brainless on their sofas thinking yes, I’m going to buy cheap milk from now on or perhaps i won’t buy it at all because it is so expensive.

    • It’s not even that – it’s just the whole concept that milk was almost regarded as a luxury without any reference to the crap that people put in their trolleys. Ie the TV licence was described as a necessary but good food wasn’t. How many people trying to budget their household shopping have a ginormous TV in the corner too – grrr

  2. Hi Lorna. Most people don’t realise that own brand milk is a “loss leader” in most Supermarkets. This means that the Supermarket sells it for less than it costs them to buy it or at a significantly lower price than branded alternatives. It sucks the consumer in and then in turn the Supermarket puts a higher markup on another item to compensate for this. It’s not a question as to how much the loss leading product costs to produce at all, it’s more a question about how many other items a consumer will buy in the shop when they go to buy milk – which will pay the difference back to the shop and bring more profits.

    Milk, along with over 20 other items, is regarded as part of a shopping basket of “essential grocery products” which is assessed on a regular basis in every large supermarket chain to check food/grocery inflation. By keeping the own brand items in this basket low, the supermarkets can give the impression that their food prices haven’t increased over a period of time. However, most savvy consumers will tell you that their grocery costs have increased by up to 25% in the past 2 years.

    Having loss leading products means that consumers get the impression that milk, amongst many other items, can be produced incredibly cheaply. It also skews the real picture of what the average person is paying for their shopping and how much it actually costs to feed a family on a regular basis.

    In my opinion, the practice of loss leading (and below cost) should be banned and in turn every product should have a regular price to the consumer which would normalise the shopping basket and give a real picture of food/nutritional poverty in Ireland.

    • ah, that makes sense, thank you Caitriona – yes, while they put up the price of the ‘treat’ that a family sneaks into the trolley. It’s a sad situation isn’t it really. I just added a short update to the post. the horsegate saga was created from greed and a demand for cheap food – do we really want that to happen again?

  3. Definitely not. We need to pay the real price for our food. Not an artificially inflated/deflated figure. Supermarkets will wheel out their “value trolleys” full of food that aren’t a real picture of the cost of food in Ireland. Politicians will point to these trolleys when we complain that the cost of groceries is increasing. Joanna Blythman wrote an amazing book called “Shopped” about the stranglehold that big supermarkets have on the price of food that consumers pay. I’d highly recommend a read if you get a few minutes once this weekend has passed!

  4. OMG I can’t believe a ‘serious’ tv presenter should even suggest that!! No wonder the public have the views they do, feeling outraged just reading this for you, farmers in general and a sadness that the public are being brainwashed to think a certain way.

  5. People need to realise that in order to get the best food we need to pay a fair price…the horsemeat scandal occurred because people didn’t question how something as valuable as food could be so cheap….value our food and our producers and think about where it comes from, we need to stop the race to the bottom

    • I agree Elizabeth – it is enlightening too that the supermarkets undersell milk as a loss leader too – pity the TV3 researchers didn’t find that out and mention it too.

  6. Milk is not a loss leader to the supermarkets, it’s a loss leader to the coops which produce it. This in turn affects milk price. With the price of the milk retarded to compensate for the amount of milk going to own label. Ie milk is now 39 cent to the farmer maybe 42 with bonus, supermarket get it for 50 – 55 cent sold for 75 . Milk has to be processed packaged delivered etc. no milk production facility is making money on this. If branded milk was the only milk available. Milk price is driven by the export market but if own label milk was the only milk available coops would make money and be able to afford to pay the farmer more.

    • So are you saying that Glanbia, for example are taking the hit when they supply Tesco for example? Well, as you say it is the farmer really because if the milk processor was making more money across the board, the farmer would make more. We committed a percentage of our milk at a certain price earlier in the year to spread the risk and are making 8 cent a litre less on that percentage – I wonder if that contract was to the supermarket on behalf of Glanbia.

      Did you see the programme?

    • I know – I haven’t included labour etc for that reason – presumed people would know yet had people on twitter asking why I hadn’t – good to see people are on our side 🙂

  7. Catching up to my blog reading late in the week. I totally agree with you, I don’t understand why people look for cheap food… would you put cheap adulterated petrol in your car? no, cos it would ruin the car, it’s sad that people are driven to believe that putting cheap, adulterated or processed ‘food’ into their bodies is right… do they not think of what will happen when the body ‘breaks’? can’t be replaced like a car would. Really loved the post Lorna, MEGA LIKE

    • That is what really infuriates me Lily, I can understand those who are really on a tight budget looking for cheaper alternatives but the huge sales in ready meals suggests that people are after something else other than a bag of spuds, carrots, onion and mushrooms and some beef to make a nutritious casserole etc. Many people are prioritising gadgets over food or cigarettes over food for example.

      The fact that this wasn’t researched properly either speaks volumes – got a guy in who does price watch stuff and he picked milk! I think I should tweet it out to RTE countrywide – Damien might do something on it

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  9. I’m totally with you, Lorna. I think it’s not really about the cost of own brand versus branded milk. The point, as you’ve said, is the suggestion that people should swap nutrient-rich milk for cheaper alternernatives which are likely to be nutrient-poor. You are what you eat and it’s essential that the appropriate proportion of the weekly budget goes to providing the best for your family. I appreciate that some families are genuinely strapped and (as Conor indicated in his newspaper article) are swapping cheap but calorific foods for more expensive but nutritious foods. Part is food ignorance, part is poor planning and part is an unwillingness to sacrifice the big TV or other non-essentials in favour of putting food on the table. In our house food comes first. And apart from all of that we should be focusing on buying local products. Many of the processed foods consumed in Ireland are imports. Every €1 spent on Irish products adds about €4 to the economy (I believe!) in increased profits and investment. Buy Irish, drink milk!!!

    • Sorry for the delay in replying June – yes, I agree, the increase in obesity suggests that people are eating too many fatty foods and drinks rather than nutritious ones too – there’s particular concern this week about obesity in kids.

      But the fact that supermarket are selling milk at a loss sends the wrong messages to consumers = the emphasis seems to be on making it appear food is cheap while really making huge profits.

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