Pine Hill Dairy (PHD) and the island’s monopoly feed supplier Pinnacle Feeds have inked a purchasing agreement that promises savings for dairy farmers experiencing financial strain amid declining milk production, linked mainly to excessive heat.
The deal, revealed during a signing ceremony at the milk processing plant on Thursday, is anticipated to secure approximately $500 000 in annual savings for the industry. Through the agreement, farmers stand to benefit from an 18 to 20 per cent reduction in feed expenses, with the overall industry poised to reap substantial annual savings.
Shafia London, the country manager of Banks Holdings Limited, PHD’s parent company, noted the challenges faced by dairy farmers in maintaining optimal production levels, citing adverse climatic conditions and escalating feed prices as primary hurdles.
London said PHD is committed to supporting struggling farmers, noting the importance of initiatives aimed at bolstering the industry.
The agreement, initially set for a year, will undergo annual renewal, ensuring continued support for farmers. The dairy industry’s economic significance, estimated at between $24 million to $28 million, was underscored by London. She also highlighted the dairy as an employer of over 300 people and estimated that each litre of locally produced milk adds $8 to the economy.
Expressing apprehension over the potential collapse of the sector, London said: “If this industry were to fail, over 1 000 cattle would have to be culled and over 500 acres of arable agricultural land would immediately go out of production. This is an industry that must survive. This industry is too important to fail.
“We can use imported milk virtually for all of our products. That’s not a secret, but there’s absolutely no desire for us to do so. We do not want an industry that relies solely on imports . . . . This would see a dent in the local economy and so we are here to support the local dairy industry.”
President of the Barbados Beef and Dairy Farmers’ Association Annette Beckett highlighted the crippling effect of rising feed prices on farmers’ operations, with some allocating up to 45 per cent of their income towards feed expenses. She expressed gratitude for the collaborative efforts leading to the purchasing agreement.
“When the feed was going up rapidly over the last two years, it meant that farmers were in the position where they needed more feed but they couldn’t afford it,” she said. “So they were spending the same amount of money but they were getting less feed.”
Rakeesh Bernard, managing director of Roberts Manufacturing, Pinnacle Feeds’ parent, affirmed the company’s commitment to maintaining competitive prices and affordability, depending on global market movements. He acknowledged the downward trend in global prices, signalling potential savings for consumers.
“We are price takers here in the Caribbean. We don’t really demand prices . . . . The volume of commodities that we buy in the entire Caribbean is not significant in comparison to Brazil, the United States, China or any other European countries.
“If we see the trends starting to move in the wrong direction, we’ll have those discussions as has been in the past couple of months when the trends have gone down and we passed on those savings to the consumers,” Bernard said.
He proposed similar collective purchasing arrangements for other agriculture sectors, underscoring the efficacy of collaborative initiatives in alleviating financial burdens.
