Out on a limb but fighting for farmers

The east coast is not an ideal location for a dairy processor. In fact, on the face of it, everything about Chestnut Dairies at Seaton, near Hornsea, ought not to work.

There are few cows round here and there are no potential customers for what they produce to the east of the farm – because that's the North Sea. Yet this is where a dairy farming family – and one woman in particular – has become regarded as a saviour to beleaguered milk producers.

Sue Varley and her husband, Eric, initially turned to milk processing in 1982. But it is since the sudden demise of Dairy Farmers of Britain last year that Sue's name has begun to be mentioned with greater regularity.

Dominic Naylor, farm manager for the Bishop Burton College Farm which suffered as a result of Dairy Farmers collapse, overflows with praise for what Sue and her family have achieved.

"Sue is so passionate about her business and her farmer suppliers," he says.

"She wants everyone to have a profit out of what she's doing. She is amazing. Our milk price has gone from a very poor 17p per litre to 24.4ppl and she is always on the phone telling us she's trying to get us more."

The East Riding was not traditionally known for milk production and in recent times farm numbers dwindled even further. Northern Dairies, once a major processor, pulled out of Hull after a long association with the area, within this past decade.

"Last year we took on dairy farmers who had lost a great deal through what had happened," says Sue.

"If we hadn't taken them on they wouldn't have been able to milk.

"When Dairy Farmers of Britain went in to receivership there was one particular Saturday night when I received a call from a dairy farmer who said, 'Mrs Varley, will you take my milk?'

"We spent three-quarters of an hour on the phone and when I came off I realised we needed to do something. We had already been discussing it, but at that point the decision was made to take more farmers on. The next morning I got in touch with most of the local supermarkets and the managers on duty had a really positive feel for it."

Everything has to pay its way, but Sue explains the very personal nature of why she is so protective of her fellow dairy farmers and the future of the industry.

"I think it's an all-round picture. You've got a dairy farmer with 30 cows that have never been off his farm. He milks his cows twice a day and talks to them as if they are people. How can you take that away from him?

"Then you have younger dairy farmers with families to support and those who have children coming through university. If we don't encourage and pay them properly then there isn't going to be a dairy farm for them in the future."

That's all very well but all the dairy industry analysts have been unanimous for years in saying that the only way to survive is to increase dairy herd numbers. Surely all Sue and her family is doing is helping put off that inevitable day a little longer for some of these smaller farms?

Chestnut Dairies is now also collecting from the North York Moors and Scarborough. It doesn't look like the blueprint that the major dairies insist is required for success. Judged by those criteria, the road down which Sue has embarked can only lead to one thing.

Sue sees it quite differently. "We were never paying our dairy farmers a figure as low as 17ppl, so where was the money going?

"The last thing I ever want to do is to sell our milk cheap. We do struggle to sell it and we have a lot brokered out at the moment.

"Our ultimate aim is to process all of it, which we have the capacity to do.

"I'd love to pay our dairy farmers even more. We want to look after all of the producers we've got.

"Our farmers who have been with us for a number of years are on a different contract to those who joined us last year. It has to be that way because we didn't want to jeopardise those who have been loyal to us. We are trying to get the best prices for all of them. Financially though we're okay."

The Varleys run a 90-100 cow dairy herd that grazes alongside Hornsea Mere and it is image that appears on their bottles. They use recyclable ones where 10 per cent of each bottle goes into the making of the next one. All the family is involved with the business, including daughters Claire and Danielle and son Mathieu.

"We started processing in 1982 because we were faced with an 85,000 overdraft and an interest rate of 19 per cent.

"We were told that if we continued doing what we were doing we would just have to pack up and leave. Eric drove the business.

"We purchased a pasteuriser on HP and brought in the packing equipment. Eric would go out and sell the milk and deliver it. I would be the one processing it."

Today Sue is proud of their modern business which she believes stands comparison with any.

They received a regional development grant which helped considerably.

Chestnut Dairies is now looking after the milk from 32 dairy farms in North and East Yorkshire. They process about a third of the milk that comes in as well as a bit of cream and Yorkshire curd from Seaton. Two-thirds of the milk is collected by Robert Wiseman Dairies and goes to Sainsburys, Waitrose and other supermarkets.

They also broker some – meaning they sell off the milk that is not contracted to the highest bidders. Success here is down to Sue's negotiating skills with companies such as Longley Farm, Meadow Foods and County Milk Products.

Eric is still a dairy farmer at heart, but Sue says they are not pushing their cows for higher production.

While Sue is relaxed about their own cows she is unrelenting in her pursuit of looking after her dairy farmers.

"We want all of our farmers to survive. We want them long term, not short term. But I never want to be false. We want to give them something that is sustainable."

There must be many negative thinkers in this industry who are scratching their heads at how one small dairy processor, stuck out on a limb, can deliver such good news by thinking positive.

Welfare is the key to dairy profits: Yorkshire Forward column Page 4