Concerns have been raised about the impact of diverting milk supply from the out-of-home sector to retail. It is thought that, while milk is being diverted from venues such as pubs, coffee shops and restaurants into retail, this is not enough to offset the decreased demand.
A spokeswoman for Dairy UK said that the fall in demand in the foodservice sector meant that many processors were making every effort to ensure a home for displaced stock was found.
Diverting stocks
“This includes diverting stock into supermarkets, home delivery services, and export and aid for the vulnerable. We must also remember that, although restaurants and bars are closed, foodservice is not totally shut down as take-away businesses are still operating,” she said.
“The overriding concern is to make sure there is enough food now and viable businesses the other side of the crisis and that’s what people are working hard to deliver every day.
Dairy UK said it was working closely with the Government to tackle the issues facing the sector.
“We appreciate all the measures announced by the Government to date on support for businesses, but more may be needed in the coming weeks for dairy businesses and their supplying farmers,” she said.
Dairy market impact
Last week, National Farmers Union Cymru president John Davies also expressed concern about the impact on the dairy market.
“The UK liquid milk market is equally split between the proportion of milk that goes into the retail sector and the proportion that goes into foodservice,” said Davies. “The first two weeks of March saw retail demand increase by 15-20%, while the foodservice sector saw a 70% drop in demand as consumers stayed away from cafés and restaurants.
“Unfortunately, the increased demand in the retail sector was not sufficient to offset the decreased demand from the foodservice sector.”
However, there was good news for dairy farmers supplying Müller who meet the conditions for the Müller Direct Premium 2020, who will be offered a milk price of 27.25ppl from May 1, 2020, an increase of 1ppl.
Rob Hutchison, operations director at Müller Milk & Ingredients said that the whole supply chain is currently under considerable pressure and facing uncertainty.
“The milk that we collect from farms across Britain plays an absolutely vital role in helping to feed the nation. So we are committed to doing everything we can to support our farmer suppliers, while maintaining first-class customer service levels and meeting strong consumer demand,” he said.
“To meet recent demand, we have significantly raised our total output. But with demand expected to remain high, and some employees absent due to self-isolation, we’re also looking for up to 300 additional colleagues to play a key role in manufacturing and delivering a range of essential dairy items.”
Last week, Müller revealed that Coronavirus panic buying has prompted dairy processor to launch a significant recruitment drive for up to 300 additional key workers amid the demand spike.
In the same week Dairy UK backed calls for the milk supply chain to improve after a meeting between the National Farmers Union Scotland Milk Committee and cabinet secretary for the rural economy and tourism Fergus Ewing MSP.
