Survey unearths worrying intentions
Nearly half of the UK's dairy farmers are poised to leave the business if farmgate prices do not improve. This is according to a survey by the Royal Association of British Dairy Farmers (RABDF).
"Forty-nine per cent of producers see no future for themselves if current farmgate prices persist for the next six months," said the group's vice-chairman, Mike King.
This would leave Britain with around 5,000 dairy farms.
Of those who said they would stay in business, 45 per cent said they have put their expansion plans on hold.
“The loss of dairy farmers continues unabated 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,” Mr King added, warning that this could leave consumers short of British liquid milk and dairy produce.
According to the survey results, it appears the producers most likely to quit were those with all-year calving herds and a level profile contract. Farmers with aligned contracts or a low-cost production system, however, believed their businesses have a future.
Reasons cited for planning to leave the business included base prices being well below the cost of production, long working hours with little financial gain, banks unwilling to give any further assistance and not having a successor to take over the business.
For the majority of those who were putting their expansion plans on hold, lack of surplus cash was given as the reason.
Falling milk prices are multi-factorial and the industry has to accept commodity volatility in the global marketplace, Mr King explained.
However, supermarket discounting has been one of the key influences on price, he said.
"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."
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