Improvement in returns ‘essential’ for South West dairy farmers

17 August 2023

Dairy cows in a barn

Dairy farmers in the South West are being forced to think seriously about their future due to concerns over insufficient returns, volatile markets and the scale of on-farm investment, an NFU survey shows.

The survey of around 600 dairy farmers, including those in the South West, reveals 9% of producers believe they are likely to stop producing milk by 2025 – up from 7% last year. A further 23% said they were “unsure” if their business would continue producing milk beyond 2025.

87% of dairy ‘farmers’ who responded said they are concerned about the impact of government regulation, with feed prices (84%), energy prices (83%) and cash flow and profitability (80%) other key factors that would curtail milk supplies.

Meanwhile, 91% of dairy farmers said the main factor to them increasing milk production would be the scale of investment needed for things such as suitable slurry storage to ensure their farms are compliant - this supports the NFU call for Defra’s Surry Infrastructure Grant to be extended to cover more areas and to lower the minimum spend threshold needed to access the funding.

Cost of production

NFU South West regional dairy board chair Stephen Dark, who farms in Cornwall and represents farmers across the region, said: “Obviously dairy farmers are concerned at present because of the current low milk price with many receiving less than the cost of production.

“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.

“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.”

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