Craft Milk Club: the slow rise of slow-milking micro-dairies

The Dà Mhìle Distillery in rural Wales is the very definition of a micro-distillery, the type of small, local and family-run operation that Members of the Craft Gin Club support and whose innovative artisanal products they can’t wait to taste every month. Dà Mhìle is one of dozens of micro-distilleries that has set up shop in recent years in the UK, riding the wave of the country’s micro-brewers whose numbers have surpassed one thousand. 

In the wake of the growing popularity of these craft alcoholic beverages is a craft beverage of another kind: milk. Local dairy farmers whose milk has more often than not been purchased by cooperatives or large-scale producers are increasingly selling direct to consumer, giving rise to a term in the spirit of that of their small, boozy cousins: micro-dairy. 

But what is a micro-dairy? As with micro-breweries and micro-distilleries, definitions vary and are sometimes non-existent. In the United States, the Vermont-based association American Micro -Dairies (soon to be called the Alternative Dairy Initiative), defines a micro-dairy as “a dairy farm milking 10 or less cows, or the equivalent number of sheep, goats (approx 25-50) or water buffalo,” and not producing more than fifty gallons of milk per day. In the UK, a specific denotation does not exist but much of the literature about micro-dairies speaks of operations in the ten to eighty cow range. 

Herds of this size can provide a substantial amount of milk and dairy products, much of which is sold direct to consumers and virtually all of which is sold in the micro-dairy’s local area. For example, John at Dà Mhìle sources the milk with which he makes all of his cheeses from a nearby dairy farm with 60 cows that delivers fresh milk to his door every day. A micro-dairy near Stratford-upon-Avon called Mabel’s Farm serves up to 500 customers with its 40 cows.

According to the Guardian, there are a mere 20 micro-dairies in the UK. But demand for them is increasing as consumers become increasingly concerned about what they eat, skeptical of big brands, and more in favour of locally-produced food and drink. In some regions in the UK, people are getting closely involved in their local micro-dairy. Susan Garbett of the 40-cow Holmeigh Dairy in Gloucestershire told the Sustainable Food Trust that their local customers “drive past our fields and see the cows that provide their milk every week.” With this local connection, Garbett has grown her dairy to 600 customers within a 20-mile radius of the farm. 

The North Aston Dairy near Oxford issues “cow bonds”, a fixed, 5-year investment opportunity that pays a 3% annual dividend. Through this innovative approach, the micro-dairy has grown its herd from 3 in 2006 to 17 today, up from 12 in October 2014 when the farm was delivering fresh milk to 250 customers within 2 miles of the farm. Other farmers have adopted a practice from the Continent and are installing vending machines at local shops that they load up with fresh milk with which customers refill their bottles.

The farmers behind these herds are unique in that they are bucking the trend towards large-scale, indoor dairy farms and sticking it to the supermarket chains, which by some calculations are destroying the little guy. But their micro-distillery revolution won’t be easy.

MILKING MICRO-DAIRIES DRY

Although the average size of a dairy farm herd in the UK remains a relatively reasonable 125 cows and that 90% of UK cows live in packs of less than 500, this may rapidly change. The Guardian reported last October that in the wake of a successful petition to open a 1,000 cow indoor dairy farm in Wales that five to ten more were in the works. The article spoke of British farmers taking exploratory trips to the US to learn the strategies necessary to run large, indoor operations, some of which in the country’s midwest reach over 30,000 cows. 

Fraser Jones, the Welsh farmer who won the petition to build enough indoor space for 1,000 cows summed up these business trips to the States as studies in efficiency and economies of scale: “There is no room any more in this game for people who are not efficient,” he told the Guardian.

Jones might be right. Firstly, he’s pushing for his cows to produce an average of 11,000 litres of milk per year and thinks he can get that number up to 15,000 from some cows. In comparison, the average cow on a micro-dairy can healthily produce 4,000 to 5,000 litres per year and would struggle beyond that. Secondly, the number of dairy farms in the UK has dropped precipitously in the past twenty years to about 13,000 down 63% from 35,000 in 1995. Thirdly, the milk market has gone global with UK farmers competing with dairies from the US to New Zealand; the UK is actually a net importer of dairy products.

But Jones’ argument holds up most when considering the effects of large supermarket chains on UK dairy farms, effects that turned increasingly negative in the first months of 2015. Many supermarket chains use milk as a loss leader, ie, they sell it below cost to get people through the door to purchase additional items. Their tremendous size combined with the fact that they can cheaply import milk means that supermarkets can squeeze farmers and their representative collectives on price. 

In January 2015, milk in these supermarkets became cheaper than bottled water.

Many dairy farmers selling to supermarkets were forced to sell their milk at less than the price that it cost to produce it. This caused First Milk, a co-operative 100% owned by its 1,400 farmers, to withhold payments to its members for two weeks in order to make up for a £10 million gap in the company’s finances, a gap cause by the plummeting price of milk which, for consumers at Tesco’s, dropped from £1.39 per four pint bottle to £1.00 in under a year. The discount supermarket chain ASDA was selling the same sized bottle at £0.89 in January. 

For the farmers, this meant that the buying price per litre dropped from a high of £0.34p to near £0.20 in many regions with regulators warning that prices had even further to fall - to £0.17 per litre. The National Farmer’s Union warned that at those rates, by 2025 fewer than 5,000 UK dairy farmers would remain in operation.

MICRO OR MASSIVE?

What does this mean for the future of micro-dairies and dairy farms in general? Are we moving towards a two-tier system in which huge supermarket chains continue to dominate dairy in our cities and suburbs and small farms sustain themselves through sales to their neighbours and at local farmers markets? Will the mid-sized dairies and collectives like First Milk become completely squeezed out of existence by the industrial and micro? Recent developments and statistics indicate as much. What this means for the long-term health of the UK’s dairies remains to be seen. But one thing is certain: as consumers become increasingly discerning about what passes their lips, micro-dairies - like micro-breweries and micro-distilleries before them - will continue to proliferate. To organise their communities, maybe we should launch the Craft Milk Club.