We’ll get through it,” says Dai Miles with a wry smile. He’s remarkably cheerful despite the series of Covid-19 events that disrupted 2020. This demeanour, his family’s commitment to a strong relationship with his fellow dairy cooperative members, and his business expertise has kept his Pembrokeshire dairy farm and Calon Wen (“white heart”) - the 25-farm strong organic cooperative - beating through the pandemic crisis.
“Pembrokeshire is a natural place to farm dairy,” Dai says. “It’s usually warm and wet here – although we did have two months of drought in the crisis. The soil’s well drained and it’s good for grass. At one time there were more dairy farms here than anywhere.”
Historically it has been the milk churn for the two South Wales cities and the valleys and their denizens remain traditional and loyal in their choices. Dai’s herd are on grass rather than expensive feed. Using the ABC grazing system, his cows are induced to the milker as much by the prospect of fresh grass as much as comfort. The herd is managing an average individual milking of 2.6 times a day – around 35-40 litres at peak. It is mid-range in size compared with others in the cooperative.
“Calon’s smallest producer has just 45 cows,” explains Dai, “and our largest producer some 650. Small herds are unusual nowadays, but the organic dividend and marketing, which highlights the benefits of the small, intimate family farm, helps.”
The Calon Wen cooperative was founded in 1999. Today it consists of 25 farms in south west and north east Wales. The business is a small but well-established part of the Welsh dairy landscape. “It was risky back then,”
Dai recalls. “The traditional milk buyers really weren’t all that interested in small organic producers. We were told that we were too small and to not do it, but we wanted to emphasise our Welshness and our healthy quality product, which gives us a greater degree of self-sufficiency and a greater control over margins.”
Building a recognised and popular brand has visibly assisted diversification into value added products such as a frozen yoghurt and a cheese range. It punches above its weight.
The Covid-19 impact
Much of Calon Wen’s product was being bought by the food service sector in significant, but under-estimated volume pre-Covid-19. “Catastrophic” is how Dai describes the impact of the virus in March. Well-known food outlet Pret a Manger procures about five million litres of milk annually. “We supply a large part of that,” Dai explains. “Overnight our contract was suspended. Primarily, this was a disaster for them - their trade was stopped in its tracks. Some 400 UK outlets were temporarily closed, affecting some 8,000 employees.”
Another important customer, Leon – which runs about 60 restaurants in the UK – also had to close. “How we liaised with both to manage the crisis for minimum mutual impact may support our business relationship in the future,” Dai explains. “Of course, I was upset. But there’s no point in getting angry and there was no time to be lost. There’s no off switch on a lactating high-yield dairy cow.”
New markets needed to be found and quickly. The large retailers distribute most of the UK’s dairy produce. Their formidable procurement position is as flexible as it is powerful. “When deliveries are being cancelled left, right and centre, you’re not in a strong position to negotiate,” Dai says. “On one occasion I was offered: I’ll take it off your hands – just bring it here. Thankfully it didn’t run to that and I didn’t need to waste milk either.”
The lockdown affected all 25 farms in the Calon Wen cooperative. “They were remarkably composed about it,” Dai recalls. “Of course, I contacted them and followed it up with a formal letter to members advising them to speak to their advisers and bank managers. We (the cooperative) took the hit and paid out to members in March.” After that they had to share the burden and it had a varied impact on members, depending on their business circumstances. “We’ve come through on short-term contracts and even the spot market. Things are improving and we have managed to find alternative customers for most of the milk for the rest of the year.”
Dai is sure that for Calon Wen members the government’s market stabilising intervention was helpful and the £10,000 grant was welcome, notably by the smaller operations. “But I know many farms are around half a percent below the 25% loss of income trigger to receive any grant aid – they’ve lost out. The bounce back scheme is good, as the Coronavirus Business Interruption Loan Scheme (CIBILS) loan does take a long time and a lot of work to organise. This process needs to be a great deal slicker.”
Dai and his fellow Calon Wen members are looking ahead post- Covid-19 and outside the Common Agricultural Policy. He has invested some half a million in his robotic milking system and recently invested in the acreage and buildings in which it is installed. Wales may also see new regulations in slurry management.
“I can keep the proposed six months’ worth here, so no more investment is required at this stage,” Dai says, “But if the regulations mean the pit must be empty at the start of a given period, this will create difficulties. This will create slurry day whatever the ground conditions and whether the slurry’s ready or not.”
“Covid-19 has taught us a thing or two,” Dai reflects. “There’s so much about value for life and how we care for the community at the high end.
We’ve started to re-learn old lessons about securing staple food production and protecting vital supply chains.
“People are realising how local businesses are vital for the local, rural economy. Profit is invested locally, local people are employed and, above all, a strong network of local supply is established and easily maintained.” Dai concludes that these lessons need to be applied to our food sector in the post-CAP economy.
“As an organic farmer I buy in to all the principles driving future land management. But we always need to produce sustainable food.”