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Dairy farmers planning mass exodus from industry

Losses narrowed at Arla last year.
Losses narrowed at Arla last year.

Nearly half of all dairy farmers are planning to leave the industry in the next six months, claims a new survey.

Results of the survey, which was carried out by the Royal Association of British Dairy Farmers (RABDF), found that nearly half of all UK producers were set to give up on dairying, while 45% of those planning to stay in the sector had put expansion plans on hold.

RABDF vice chairman, Mike King, said: “49% 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. Those intentions could result in the industry with insufficient critical mass and consumers short of British liquid milk and dairy produce.”

Reasons given for planning to quit included: receiving a price well below the cost of production; long hours for very little financial returns; banks unwilling to give further assistance; and having no successor in place to carry on with the business.

While a lack of surplus cash was cited as the reason for putting expansion plans on hold.

Mr King said: “The loss of dairy farmers continues unabated with 434 quitting in the last 12 months during which period over £1billion has been wiped off farmgate incomes due to falling milk prices. 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.”

The last update from the Scottish Dairy Cattle Association revealed that the number of dairy farms in Scotland fell to 982 in the first six months of the year.

Although six new dairy farms started up in the first half of the year, a total of 19 left the industry, leaving the number of herds at its lowest since records began in 1903.