Dairy: Confidence Shatters Without Positive Signals

UK - The National Farmers Union for Scotland say that the Dairy sector in the United Kingdom is so fragile that farmers need constant positive signals from milk purchasers in order to sustain any kind of optimism.
calendar icon 6 May 2008
clock icon 2 minute read

The 2008 Farmer Intentions survey from Dairy Co, which was launched today, conveyed a degree of optimism, with more farmers looking to expand their business than planning to leave the dairy industry. Crucially however, Dairy Co points out that investment and expansion plans will still not be enough to halt the current decline in UK milk production.

NFU Scotland is highlighting the fact that milk prices must now rise in order to secure future supply. Farm input costs for essentials such as feed, fertiliser and fuel continue to rise to record levels against a backdrop of static farmgate milk prices, effectively leading to a drop in income for producers.

Willie Lamont, NFU Scotland’s Milk Committee Chairman, said:

“This survey is positive in that it shows a renewed and much needed optimism within the dairy industry. Higher prices towards the end of 2007 led many to feel encouraged and that has been demonstrated within the survey.

“However, what is also clear is the intense fragility of the industry. There are still many out there who plan to leave dairy farming and any optimism that we are seeing is simply not enough to stem the decline in overall milk production.

“The really stark message lies in just how price sensitive the industry is right now. The figures showing the numbers of people who would leave the industry if prices were to drop are quite astounding and if they came to fruition they would leave us with serious milk shortages. Worryingly, if input costs continue to rise at the current rate and milk prices remain the same then we would effectively be seeing a price cut. The margin being made is constantly eroding and it’s not hard to see why people are fearful of the future.

“I therefore find myself reiterating what I’ve said so many times. If we want to continue to have British milk and dairy products on our shelves, then milk buyers need to recognise both the increase in production costs and the fact that dairying is sitting on a very dangerous precipice and they must react accordingly.

“The message is simple, we need some positive price signals from the major milk purchasers, and we need them now. Farmers need to be in a position where they feel safe to reinvest in their businesses so that they can continue to supply the white stuff!”

TheCattleSite News Desk

© 2000 - 2024 - Global Ag Media. All Rights Reserved | No part of this site may be reproduced without permission.