Dairy farm businesses under threat, according to NFU survey

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There’s growing uncertainty among the UK’s dairy farmers and little confidence to face the challenges, says county advisor Gemma Harvey

Britain’s dairy farmers are being forced to think seriously about their future, a new NFU survey shows, thanks to increasing concerns over insufficient returns, volatile markets and the scale of on-farm investment.
A survey of the intentions of nearly 600 dairy farmers reveals that 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 – just two more years.
Of the dairy farmers who responded, 87% 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 preventing them increasing milk production was the scale of investment needed for things such as suitable slurry storage to ensure their farms comply with current regulations. This supports the NFU call for DEFRA’s Slurry Infrastructure Grant to be extended to cover more areas and to reduce the minimum spend threshold needed to access the funding.
NFU dairy board chairman Michael Oakes says: ‘It’s clear that significant inflationary pressures, combined with below-cost-of-production prices are continuing to threaten the resilience of British dairy farming businesses. We are now facing a crisis of confidence among Britain’s dairy farmers.
‘The results of this survey show that, now more than ever, we need resilient and collaborative dairy supply chains. It’s vital that we invest and reverse this trend of boom or bust. The 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 produce, we know that the long-term future is bright for our sector.
To ensure we maximise this potential, it’s imperative that the 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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