Cows being milked in a parlour© Tim Scrivener

Better farm management will help milk producers ride out a difficult trading environment until supply and demand comes back into balance, according to a leading banker.

“The position now is one where we have global supply exceeding growing global demand,” said Alan Wilkinson, head of agriculture at HSBC Bank.

“That is why we have low prices and until that supply and demand changes, we are going to see the type of environment we have.”

See also: ‘Change of mindset can help ride out dairy slump’

The past five years had seen a growing deficit in value terms when it came to milk products. But Mr Wilkinson said he was optimistic for the future – not least because more than £250m had been invested in UK dairy processing since 2010.

Mr Wilkinson was speaking at a dairy summit aimed at identifying fresh approaches to secure a future for UK milk producers.

Some 80 farmers and industry professionals gathered for the event to discuss a way forward for the sector, which has suffered two years of price cuts.

“Average management doesn’t get you anywhere.”
Alan Wilkinson, HSBC

Held in London on Tuesday, 3 November, the summit was organised by AgriHive – a group of UK farmers and dairy industry professionals brought together by James Walker, a Nuffield scholar from Australia.

Suggesting that the number of dairy farmers would continue to decline, Mr Wilkinson said it was vital to ensure those producers who wanted to remain were the best globally.

It was important they were able to compete on the world stage, rather than just being the best in their parish or county, he said.

Dairy farmers were experiencing the effect of market-focused and globally oriented milk exporting businesses, said Mr Wilkinson.

This meant UK producers had to be as internationally focused as their Irish, Danish and New Zealand counterparts – and that meant better management.

“Average management doesn’t get you anywhere,” said Mr Wilkinson. “Being average is not what gets me out of bed. I try every morning to be the best.

“I don’t always achieve it, but when I see what the best businesses are achieving, it is something we really have to start thinking about.”