More than a third of dairy farmers plan to increase milk production in the next five years, according to a survey by Barclays bank.
Some 34% of the 300 English and Welsh farmers interviewed said they would increase milk output and the same proportion planned to invest more than £50,000.
Of the remainder, 57% said milk output would stay the same over the next five years and 8% planned to cut production.
"There has been ongoing restructuring in this country's milk production for many years, with a well-established trend for producer numbers to decline, but coupled with an expansion in production by those remaining in the sector," Barclays agricultural specialist Euryn Jones said.
"There is a wide range in the amount of investment planned, which reflects the range in scale of milk production on farms in England and Wales."
Mr Jones acknowledged confidence in the sector had been dented by rising costs, but said some farms were still achieving good business performance and an above average milk price, resulting in a significant number who planned to invest in the future. Those with no investment plans could include farms that had already invested recently, he noted.
The survey also found that 37% of dairy farmers planned to invest in some form of renewable energy project, with most planning to do so in the next year.
Wind and solar were the most popular options, with significantly less demand for anaerobic digestion, biomass and ground-source heat. Most were keen to save money on energy costs and generate income for the farm, but become more self-sustainable in energy and reducing the farm's carbon footprint were also highlighted as factors.
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