NI science takes the centre stage

The 67th annual meeting of the European Federation of Animal Science (or EAAP) was held for the first time in NI this week, with around 1,500 delegates from around the world descending on the Waterfront Hall in Belfast.

At a welcoming ceremony on Tuesday, EU Farm Commissioner Phil Hogan and local Agriculture Minister Michelle McIlveen were the main guests.

In his welcome address, Commissioner Hogan said that concerns over commodity prices, food security and climate change emphasise how vital it is to invest in agricultural research and innovation. However, he acknowledged that in recent years, the EU has allowed agricultural research to become a lower priority.

“There is a resurgent conviction at European level to change this fact” he said, highlighting that the money going to Horizon 2020 (EU programme for research and innovation) has now doubled.

He also acknowledged that research takes time, so a long-term approach is required, and urged scientists to work together to maximise the resources currently available. He concluded by emphasising that agriculture has not caught up with the digital revolution.

“Smart and digital agriculture holds many promises for a more sustainable, productive, and competitive EU farm sector. We must continue developing new ideas and solutions, while also encouraging a wider uptake in the broader farm community,” he said.

Policy

Sharing the platform was NI Agriculture Minister Michelle McIlveen, who highlighted the vital role that science has in local policy development and in tacking issues such as bovine TB.

“‘The costs of TB can’t continue indefinitely. Science is crucial,” she said.

The Minister also used the opportunity to raise the issue of a sustainable land management strategy currently being finalised by an expert group led by former UFU president, John Gilliland. The group is expected to make a number of proposals around long-term land leases, water quality and increasing output by better use of resources.

“NI is a perfect location to pilot new approaches to land management policy. We can take the lead, demonstrating how policy, science and industry can work together, not just for us in NI but further afield in Europe,” said Minister McIlveen.

It sounded like a message primarily aimed at Commissioner Hogan. It is understood that the funding required to deliver the policy could run to £150m.

Health benefit from animal-based food

Those who attack livestock farming often point to concerns about saturated fat (linked to obesity) or the sustainability of food production. However, the nutritional benefits of eating animal-derived foods often far outweigh the risks.

“Be careful what you wish for” said Professor Ian Givens, a food nutritionist from Reading University.

In particular, he highlighted the decline in milk consumption, especially in females between 11 and 18, just at a time when this group needs calcium for growth. With vitamin D often sub-optimal in diets as well, it is a perfect recipe for bone problems in later life. “There is emerging evidence of a long-term effect on fracture risk (osteoporosis) in adult women,” he said.

Milk is also an excellent source of iodine, and studies have shown that iodine concentrations are higher in conventionally produced milk than in organic milk. This is relevant to women in early pregnancy, where lower iodine levels have been linked to poorer brain development in unborn children.

“People who choose to consume organic milk during pregnancy need to know this,” suggested Givens.

He also highlighted concerns that young people have replaced milk in diets with sugar-based drinks, with research showing that this can lead to a marked increase in fat within the liver, which is a major risk factor in type 2 diabetes.

For older people, he said that there is no evidence of an increased risk of cardiovascular disease linked to milk consumption. In fact, increased milk consumption is associated with a lower risk of fatal stroke, while increased yoghurt consumption is associated with a lower risk of type 2 diabetes. Less is known about the possible health benefits of cheese, but the latest evidence would suggest that dairy products that have gone through a fermentation process could deliver various positive effects, suggested Givens.

On red meat, he maintained that 25 to 30% of 11- to 18-year-olds have low ferritin (linked to iron) in the blood, which is associated with anaemia. “This is due to a lack of red meat in the diet,” he said.

He also acknowledged that there is evidence of a link between eating meat (especially processed meats) and increased risk of cancer. “We can’t argue with the data, but it has to be put in context. Alcohol carries a much greater risk than red meat, yet there is no clamour to close down our distilleries,” Givens said.

Among the hundreds of science-based presentations at the European Federation of Animal Science conference in Belfast this week, there were a few that were delivered by non-scientists.

One of these was by retiring chief executive of United Dairy Farmers and Dale Farm Group, David Dobbin, during a session entitled “Creating an enduring dairy sector post-quota”.

Dobbin was forthright in giving his views. He bluntly stated: “We need to up our game all along the supply chain to take charge of our destiny. The dairy industry needs to improve its productivity.”

Dobbin argued that there is a need to pursue sustainable growth, which is market-led rather than production-led. He said it’s necessary to work on growing the market in value as well as volume, grow in response to customer demand and stimulate demand by building unique selling points and promoting products.

Both processors and producers need to be more competitive, becoming better, not just bigger, he argued. There is a need to take out cost and be more efficient wherever possible.

Dobbin said that farmers should be wary of a processor who makes little or no profit, as that business won’t last long if it hasn’t money to invest in improving itself. He referred to a “value pyramid” (see graphic) in dairy products, with commodity products at the bottom in terms of lowest value and highest volatility of prices compared to nutritional products at the top with highest value and least volatility. Of course investment is needed to develop and market such products.

At farm level, Dobbin quoted benchmark figures indicating that there is an opportunity of an extra 3pence/litre margin for the average milk producer by improving their operation to the standard being achieved by the average in the upper quartile of producers and an opportunity of 5p/l for the average producer in the bottom quartile if they lift their performance to the current median level.

He suggested a target of 2.5% annual improvement in the efficiency on farms can be attained from a combination of better genetics and improved management.

Dobbin is chair of Dairy UK, the trade association for the British dairy supply chain that includes representatives of farmers, co-operatives and manufacturers, bottle milk buyers and milkmen across the UK. Its members handle around 85% of UK milk output.

He said Dairy UK’s objectives are to create an environment:

Dobbin referred to a “demographic time bomb” within the UK as people in younger age groups don’t consume as much milk as older people. He said that when children are asked what are the most important foods, the predominant answer is fruit and vegetables. This may be due to the “five a day” campaign that has raised the profile of fruit and veg. The dairy sector shouldn’t be afraid to copy that approach and is doing so in some countries with a “three a day” campaign by governments aiming to ensure that people meet their daily calcium needs. Emphasising the importance of dairy products, Dobbin pointed out that:

Referring to a graph of milk and dairy product prices, which showed peaks in 2007, 2011 and 2013, and troughs in 2009, 2012 and in 2016, David Dobbin stated that the 2016 trough has seen the lowest prices in real terms in the past 20 years.

He pointed out that additional production within Europe and the northern hemisphere has been the main cause of imbalance between supply and demand and hence poor prices. Europe’s milk output in 2015 was up by 3.175mT over its 2014 level, while US production was up by 1.17mT but New Zealand output fell by 303,000t.

Dobbin said that in the absence of quotas and since the removal of EU market management measures during various reforms of CAP, price is the main control mechanism on milk output. The net growth in EU milk output has to be exported so the EU industry has to be globally competitive if it is to grow, he said.

With demand relatively constant, volatility of markets and prices is largely due to supply. Weather is always a factor and climate change may be causing more erratic patterns. But there is also knock-on volatility from currency, oil and other commodities. The modern world is one of faster transaction speed and transmission of information. Along with increasing trade liberalisation and global flows of product and money, it’s a recipe for volatility, even before throwing in the effects of speculation and investment in commodities.

Task force

Commenting on the EU agri markets task force expert group (of which he is a member), David Dobbin said that the mandate of the Task Force is to discuss relevant issues, such as market transparency, access for farmers to financial instruments and futures markets.

He said that there is clearly a role for co-ops/milk processors to manage volatility and transmit to producers the market requirements for output and quality.

The date for the report of the task force has been put back until the end of this year but Dobbin indicated “emerging themes”:

Referring to the possibility of a futures market for dairy products in Europe, Dobbin suggested that this could add to volatility as experience has shown that such markets need traders and speculators to be involved to ensure that sufficient transactions occur.

On the future following the Brexit vote, he noted that it’s possible there will be no intervention in the market by the UK government – certainly there has been no mention of it – and that would be a big change from the current position with intervention support having played a crucial role in stemming the slippage in milk prices, albeit at a low level.

Price volatility to continue

Milk price volatility is set to continue, according to economists at Teagasc. Fiona Thorne, presenting a paper on the outlook, pointed out that weather and climate, political unrest and government policies will continue to impact on supply and demand so markets and prices are bound to be affected.

A recovery to “sustainable levels” of prices for milk isn’t expected until the first half of 2017.

Thorne explained the cycle where low prices lead to financial problems for producers and reductions in output followed by high prices, which result in some end users around the world switching into alternative products, so the cycle continues.

Looking at possible solutions, she said that forward contracts eliminate upside opportunities and downside risks. She indicated that more sophisticated tools such as futures markets or insurance against low prices may not be suitable for farmers. There are costs involved but there is increasing desire to see a futures market for dairy products established in Europe.