Almost half of Britain’s dairy farmers are scheduled to leave the sector and 45% of the remaining half planning to continue in production have put their expansion plans on hold, according to an intentions survey carried out by the Royal Association of British Dairy Farmers.
“Forty nine per cent of producers see no future for themselves if current farmgate prices persist for the next six months leaving Britain with approximately 5,000 dairy farms, of which half have no confidence in immediate investment,” reports RABDF vice chairman, Mike King. “Those intentions could result in the industry with insufficient critical mass and consumers short of British liquid milk and dairy produce.”
The RABDF survey concluded, in general, that it was the producers with all year calving herds and a level profile contract who planned to leave, whilst those with aligned contracts and or low cost production systems believed their business had a future.
Reasons for planning to quit ranged from base price well below cost of production, long hours for very little financial return, the banks were unwilling to give further assistance, to no successor so why continue. Lack of surplus cash was the simple answer from the majority of those who indicated they intended to put their expansion plans on hold.
“The loss of dairy farmers continues abated with 434 quitting in the last 12 months during which period over £1 billion has been wiped off farmgate incomes due to falling milk prices,” says Mr King. “These price trends are multifactorial; we have to accept commodity volatility in the global marketplace and other influences outwith our control and factor them into our long term business plans.
“However supermarket discounting has also been among the key price influences. Whilst we welcome the support for liquid milk that some supermarkets have demonstrated in the last few weeks, we continue to urge all retailers to pay all farmers a fair price for milk for processing – one which covers cost of production and leaves sufficient for investment purposes.”
