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news / 28th January 2013

Jersey Conference Debates Producer Organisation

Jersey herd owners, with an average herd size approaching 400 cows, listened intently to the pros and cons of a Producer Organisation at the second UK Jerseys milk conference.

Speaking at the UK Jerseys Milk Conference, Duncan Rawson of EFFP explained the opportunities and potential pitfalls of a Producer Organisation. Jersey breeders and processors also learned about the wide range of successful promotional and supply management activities that the Scottish Salmon Producers Organisation undertake.

Duncan Rawson

Discussions were led by Professor Phil Thomas, chairman of the Scottish Salmon Producers Organisation, and Duncan Rawson of EFFP. Most enlightening was the scope described in the wide-ranging appraisal, and successes already being achieved from POs beyond the dairy sector.

Not limited to Jersey producers, the audience also included a strong representation of milk purchasers along with Guernsey-keepers too. The milk purchasers were all using Jersey milk, either for speciality products or cheese-making; and it was in such niche markets that Duncan Rawson foresaw that POs could make most difference in the UK.

Scottish Salmon – a blueprint for the high-end market

Prof Thomas described both the growth and consolidation within the Scottish farmed salmon sector. Scotland is the number three producer behind Norway and Chile. With relatively few, but very large, businesses within the Scottish PO it is interesting to note the benefits gained from working together, especially in prime export markets.

Strategy before Structure

Duncan Rawson’s starting point pressed home the need to agree long term aspirations and understand the customers, which includes retailers as well as processors.

While collective price negotiation is a significant option within the EU proposals, it is not an essential activity within other areas where POs operate, as already described in the Scottish Salmon example. POs can function effectively in other ways that build stronger supply chain relationships, add value to milk, and empower milk producers to collaborate with one-another by sharing best practice, and obtain optimal input costs.

Where to Start

Duncan Rawson’s action plan is to:-

  • Set-up a small working group
  • Take advice
  • Agree concept
  • Discuss with farmers
  • Understand customers
  • Develop business plan
  • Draft legal document

Roger Trewhella who chairs the Jersey & Guernsey Forum, commented that the forum is an existing discussion arena for all parties with a commercial interest in the milks. It focuses on joint marketing and involves a number of processors as well as the breed societies. Activities which embrace improvements in supply, along with the sharing of best practice, are steps which will be key to a successful integrated supply chain.

“With or without a PO these things need to happen if the niche value of Jersey milk is to be secured. While we expect a good price that reflects the milk quality on offer, negotiating that base price could get in the way of capturing niche value,” concluded Mr Trewhella. “That seemed to be the mood of farmers at the end of the meeting. Will it happen? Now it’s down to farmers.”

 

 
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