Vertically Integrated Milk - How Some Yorkshire Dairy Farmers are Increasing Their Profit Margins

Many of us will have heard of the plight of British dairy farmers who over recent years have been victims of the way the dairy industry is constructed and wider world pressures.

Milk may seem cheap to the consumers with supermarkets using milk as a loss leader, selling it for less than the cost of spring water. Yet it costs some 30p a litre to produce and some farmers only receiving 15 p per litre. Many farmers are losing money on every litre of milk they produce and therefore are leaving the industry.

Other factors which are outside the control of farmers include currency exchange rates, and low price milk imports which impact on the cost of production and the price farmers receive.

British dairy farmers are not alone in this problem with similar issues of low prices being reported in Australia.

Some retailers are putting in place pricing mechanisms that support their farmers and pay a price above the cost of production – these include Tesco, Sainsburys, the Co-operative, Waitrose and Marks and Spencer.

A number of farmers are also developing ways to increase how much they are paid for their milk by vertically integrating the diary business; by integrating production, processing, bottling and distribution of milk in one business.

One farmer Jeremy Holmes of Delph House Farm near Denby Dale (HD8 8XY) for example has installed a milk vending machine. This enables him to sell raw unpasteurised milk direct to customer cutting out the processors and supermarkets and enables him to be paid a higher price for his milk. Although the milk is triple filtered, it’s not pasteurised, a process which kills off bacteria in milk.  It’s therefore not suitable for consumption by people with low immunity or pregnant women and babies.

Another farming family, the Goodalls, from Scarcroft near Leeds (LS14 3HQ) have for a number of years not only been dairy farmers, they have also been processing their milk including pasteurisation, homogenisation and bottling. This they sell direct to customers via a door step delivery service; which covers north Leeds and villages between Leeds, Harrogate, Knaresborough, and Tadcaster including the town of Wetherby.

The Goodalls are also investing in the latest technology which includes robotic milking machines which milk the cows in the fields and they proudly displayed this equipment along with their cows at the 2016 Great Yorkshire Show.

If you or friends want to support our British Dairy farmers then look out for the Red Tractor symbol on the dairy products you purchase and where possible purchase direct from a farmer who is geared up to retailing their milk.

Yorkshire Farms that sell milk direct to the public include:

Delph House Farm Denby Dale High Flatts, Denby Dale, Huddersfield, HD8 8XY    01226 762 551

Beech Grove Farm, Scarcroft, Leeds, LS14 3HQ     0113 2892229

Longley Farm  Holmfirth, HD9 2JD  01484 684151

Town Head Farm, Grassington, Skipton BD23 5BL  01756 752 296

Town Head Farm, Askrigg, North Yorkshire, DL8 3HH   01969-650325

Brymor High Jervaulx, Masham, Ripon, HG4 4PG

Lyon House Farm Lyon Road, Eastburn, Keighley, West Yorkshire BD20 8UX

Dean House Farm, Luddenden, West Yorkshire, HX2 6TP      01422 882 234

Old Crib Farm Old Crib, Halifax, West Yorkshire HX2 6JJ       01422 883 285

Heath Lea Farm, Barkisland, Halifax, HX4 0BZ         01422 823 201

Dyson Cote Farm, Snowden Hill, Oxspring, Sheffield S36 8YR  07788 477 825

Cliffe House Farm, Hill Top Road, Dungworth, Sheffield, S6 6GW   0114 233 3697

Lawns Farm, Morthen, Rotherham, South Yorkshire, S66 9JH    01709 700 788

For a Map of farms elsewhere in the country selling milk direct to the public see HERE

If you are a farmer who is selling milk direct to the public please send me your details and I will add you to the list. 

You may also find my blog on: Cows, Cattle Breeds Milk Proteins & Enjoying Milk on Breakfast Cereals, after a Sixteen Year Gap of interest. 

How to Save the Village Pub

Occasionally I get the opportunity to learn more of the work of other organisations that support rural communities. One such opportunity recently presented itself when I was invited to join a group of people looking at how rural communities had saved their village pub after it had been closed by the properties companies that owned them.

The event was organised by the Plunket Foundation which helps communities to take control of their challenges and to overcome them by working together.

Plunket was founded by Sir Horace Plunkett, who believed that rural communities didn’t have to wait for someone else to make life better for them; they had the potential to do it themselves.

The theme of the tour, in addition to visiting three rural pubs which had been saved by their local communities, was “More than a Pub” and hence we saw a number of examples where pubs had developed new ways to connect and serve their local communities.

The First Pub visited was the George and Dragon in Hudswell near Richmond in North Yorkshire.   Following a tenant over borrowing and being unable to keep up his payments, the pub had been re-possessed by the bank and put on the market.

As the people we met remarked during the period the pub was closed there was little focus in the village for community life, it was as though the village had died, the welcoming light in the window, a warm fire in winter and people in the bar had all been lost.

Following a public meeting in the Village Hall it was agreed that efforts should be made to save the pub and bring it into community ownership.

This was done by establishing a Social Benefit Society, a form of Co-Operative whereby local people could invest in the project, be paid a small return on their investment, perhaps 3or4% a year and could after a couple of years have their money back, provided the business was still viable and others wanted to purchase their share. The value of their shares would not increase in value but could go down if the business was unsuccessful. Each shareholder had one vote.

The purchase price was raised with a grant of £50,000 from the Rural Access to Opportunities Fund and the help of the Key Fund which bought £20,000 of shares as well as £120,000 worth of shares purchased by local people and supporters. 

Volunteers helped to renovate the pub and a board of eight directors now manages the operation which included finding a tenant who runs the pub on a daily basis, with the rent set at a level at which they could make a living.

The current tenant has embraced the culture of the project and sources local food and has a wide range of beers on offer from smaller breweries. Following the theme of More than a Pub, part of the premises is now a community shop and stocks mainly essentials, which where possible are locally sourced including local organic milk and cheese.  

With a large part of the pub garden being converted into community allotments where a couple of bee hives are sited. On the front of the pub there is also a community defibrillator.  There is also a small library in the porch.

The second pub we visited was The Foresters Arms at Carlton in Coverdale again in the YorkshireDales National Park .

This time the pub had not only been closed but much of the equipment had been taken out and the owners wanted to turn it in to three houses and were in the process of applying for planning permission to do this.

Again a public meeting was held in the village hall where Martin Booth of the George and Dragon told their story. At the meeting a group was formed to work in a similar way to the group that had saved the George and Dragon in Hudswell.

This time the asking price was a lot higher and over £250,000 was raised through a share issue for the purchase and £150,000 for refurbishment. Some 60% of investors are local people with many others being owners of holiday cottages.  Amazingly the committee reported they didn’t have a problem raising the money for the project with investments ranging from a few £100 to £20,000.

Through the building project there was a requirement for considerable liaison with officers of the National Park Authority as the building was a listed structure and could easily have contained a bat roost.   However a full refurbishment has now taken place which has made the rooms much lighter and attractive. Again, like the George and Dragon, a tenant was found and appointed. 

The final pub on the study tour was the Dog Inn in Belthorn near Blackburn.

In 2014, the pub closed its doors for what could very well have been the last time. The owners at the time were unable to find a suitable landlord so in February 2015 they put the pub and adjoining land up for auction. That sale was completed in early March and Belthorn’s last remaining pub had actually closed its doors for the very last time… or had it?

However local people registered the pub as a community asset with the local authority. This would give the community time to develop a bid to purchase the pub. A meeting was arranged in the school hall to gauge support and following this, discussions where started with the developer who had purchased the property. In March 2015 an agreement in principal was reached for the community to acquire the pub. A business plan was developed and a Limited company established and a share offer issued to raise the £180,000 to purchase the pub and some working capital.

In June 2015, sufficient funds had been raised to enable our acquisition to proceed and contracts were signed.

This was followed by intense work on refurbishing the bar area and on 15th November 2015, the pub once again opened its doors, with the pub managed by a manager employed by the directors of the Social Benefit Society.  

Along with the bar, a café area has been developed, which is an informal and family friendly area. A shop is planned in addition to upstairs community meeting rooms and outside, community gardens are being established.

What for me has been so exiting about all three visits is that communities have risen to the challenge of saving something that is important to them and that through this they have been able to fulfil the vision of Sir Horace Plunkett: “That its possible for rural communities to make life better for themselves”, in these cases by saving local pubs and making them in to a foci for community life.

For more details of the Plunket Foundation see www.plunkett.co.uk

For Details of Assets of Community Value Right to Bid click HERE

The George and Dragon  http://georgeanddragonhudswell.co.uk

The Foresters Arms   Foresters Arms, Coverdale (forestersarmscoverdale.com)  and www.coverdalecommunitypub.co.uk

The Dog Inn www.thedoginnatbelthorn.net