Serious issues caused by ‘volatile markets’ and ‘scale of investment’
Britain’s dairy farmers are being forced to think seriously about their future due to money concerns, according to a NFU survey.
The union says volatile markets and the scale of investment are causing serious issues for farmers.
Nearly 600 dairy farmers were surveyed. Approximately 10% of producers believe they’re likely to stop producing milk by 2025. It’s an increase of 7% from last year.
Around a quarter said they were ‘unsure’ if their business would continue producing milk beyond 2025.
Nearly 90% of dairy farmers said they’re concerned about the impact of government regulation. Researchers found key factors curtailing milk supplies include feed prices, energy prices, cash flow and profitability.
Respondents said making ends meet was becoming tricky for them due to the high costs associated with ensuring key working areas remain compliant with all of the rules governing the agricultural sector.
‘Obviously dairy farmers are concerned at present because of the current low milk price with many receiving less than the cost of production,’ says Stephen Dark, NFU South West regional dairy board chair.
‘With the majority needing to invest in infrastructure to comply with current slurry and the forthcoming air quality regulations, an improvement in returns is essential for farmers to have the confidence to commit.’
An industry facing the squeeze?
‘The dairy processors and retailers need to be careful not to squeeze the industry too far because a consequence of the price being too low for a considerable period of time will see their milk pools diminish.’
‘This can be seen in the results of the survey as potentially up to 31% could quit production within the next two to three years.’
‘It’s clear that significant inflationary pressures combined with below cost of production prices are continuing to put the resilience of British dairy farming businesses under threat. We are now facing a crisis of confidence among Britain’s dairy farmers,’ says Michael Oakes, NFU dairy board chair.
‘The results of this survey show that, now more than ever, we need resilient and collaborative dairy supply chains. It’s vital we reverse this trend of boom or bust and invest in our supply chains.’
‘New industry-wide regulation on contracts, expected to be introduced later this year, must support fairer, more transparent and accountable supply chains. But regulation isn’t a silver bullet.’
‘With increasing global demand for British dairy, we know that the long-term future is bright for our sector.’
‘To ensure we maximise this potential, it’s imperative that government continues to work with us to ensure we have the right environmental, regulatory and trade framework in place to support the production of high quality, nutritious and sustainable food.’