Dairy producers braced for an uncertain future, NFU survey reveals

15 August 2023

A photo of a cow fitted to a dairy parlour

Almost 10% of dairy producers say they are likely to stop producing milk by 2025, with smaller producers being the most impacted by the ongoing market situation. 

The NFU’s Dairy Intentions Survey of almost 600 UK dairy farmers has found that insufficient returns, volatile markets and the scale of on-farm investment required are all reasons why many of Britain’s dairy farmers are thinking hard about their future in the sector.

In addition to those who are looking to stop production all together, a further 23% of all milk producers have said they are ‘unsure’ if they are going to continue production beyond the next two years. 

Smaller enterprises producing less than 1 million litres of milk per year are also more likely to stop production before March 2025, compared to those producing higher volumes. 

Based on figures from the AHDB, there are currently an estimated 7,500 dairy producers in Great Britain, a figure which has decreased by 4.8% since last year. 

The survey also revealed: 

  • Increases in input prices such as feed (84%), energy (83%), and fertiliser (74%) are all particular areas of worry.
  • Over one third (36%) of those ceasing production are doing so due to retirement, with almost a fifth (18%) handing over their farm to the next generation.
  • Over half (52%) of producers stopping production are unable to keep up with the scale of investment required for their enterprise to stay compliant, such as slurry storage, a factor that is highlighted as a main concern for the majority (91%) when considering whether to increase production in the future.

“With increasing global demand for British dairy, we know that the long-term future is bright for our sector."

NFU Dairy Board chair Michael Oakes

This last statistic supports the NFU’s call for Defra’s Slurry Infrastructure Grant to be extended to cover more areas and to lower the minimum spend threshold needed to access the funding.

Regarding the wider environmental framework dairy farmers operate in, the NFU is lobbying to ensure regulation is fit for purpose, works alongside profitable, productive food production and that environmental support schemes, such as the SFI (Sustainable Farming Incentive), provide a financially attractive and accessible offer to dairy farmers

Fairer, more transparent supply chains needed

Speaking on inflation and production costs, NFU Dairy Board chair Michael Oakes said it is obvious these factors are putting the long-term resilience of dairy farming “under threat”, leading to a “crisis of confidence” amongst British dairy farmers.

The survey results identified that supply chain fairness was a key factor with almost 90% of dairy producers saying this was important to support future milk production.

New industry-wide contract regulation expected to come in later this year “must support fairer, more transparent and accountable supply chains,” said Michael. “But regulation isn’t a silver bullet,” he added.

Labour concerns hoped to be addressed

Better access to labour is also a key component, with almost three quarters (74%) of respondents seeing this as a barrier to the growth of their business.

In a response to the Migratory Advisory Committee’s call for evidence on the Shortage Occupation List, the NFU has called for the role of dairy technician to be added, to help alleviate some of the labour woes the sector is facing, and is working with industry partners on better promotion of dairy careers domestically. 

‘Future is bright for dairy’

“With increasing global demand for British dairy, we know that the long-term future is bright for our sector,” said Michael.

“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.”

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