Dairy farmers’ confidence in the milk industry has slipped with 13% planning to quit, according to the 2011 DairyCo Farmer Intentions Survey.
That was a 4% increase in the number expecting to leave when compared with last year’s survey results.
Only 31% of farmers expected to increase production, against 35% last year, with just over half likely to maintain production at current levels.
“With 13% of farmers intending to leave the industry, there is a concern that GB will stand to lose milk production capacity if there is not sufficient investment,” said Matt Johnson, senior analyst at DairyCo. “Only 6% of GB farmers surveyed plan to invest more than £250,000 over the next five years. This represents a 3% drop on last year. The survey estimates that GB milk production could fall by up to 4% within the next two years.”
Farmers cited low milk prices and high input costs as their greatest concerns, with 48% of those decreasing or ceasing production saying the main reason was because dairy farming was not profitable. “All farmers under the age of 30 that were intending to leave or decrease production cited this as their reason,” said Mr Johnson.
Surprisingly, although 56% said milk price was a major concern, 54% said they were happy with their contract, with only 36% unhappy with their contract. “This may indicate that dairy farmers do not connect milk price and contracts as interrelated issues.”
The average age of the 1,200 respondents was 54 years old, with 30% aged 60 and over, and just 9% aged 39 and under. However, younger farmers were considerably more optimistic about the future, with 69% of farmers under the age of 30 intending to increase production, said the report.
Expanding farmers were more likely to be younger producers with solely dairy enterprises. They were also more likely to have a successor, with 73% of those intending to expand having a successor lined up compared to 38% of industry leavers.
“Those producers with a retailer-aligned contract also have more confidence in the future, with 41% planning to increase production compared to 29% of those on a non-aligned contract.” Industry leavers were likely to be older, with smaller, mixed farms, with 2.2 dairy farmers expecting to quit every day in the next two years, compared to a forecast 1.6 a day in the 2010 survey.
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