Lower subsidy payments from 2013 mean farmers that are not efficient will likely not survive the next 10 years in production, producers have been warned.
Subsidies are the profit in many livestock businesses, according to Richard King, head of business research at Andersons speaking during the headline debate on future proofing livestock production.
He said while it was likely single farm payments would be at a lower level from 2013, even at the worse prediction by 2020, he said they would only be half of the value they are currently worth.
This means farmers have got to be more efficient in order to survive, said Mr King. “Already there is a wide range in efficiency. In the dairy industry, costs range from 20p-40p a litre, which means the majority of the dairy industry is not viable, particularly when you look at the investment requirements for the long term.
“In the beef and sheep sector there is an even wider range of productivity than dairy and while there will be some businesses making profits, others won’t. Those worse businesses will fall off the bottom and resources taken up by better businesses.”
And efficiency means finding a way of turning water, air and sunshine into meat and milk, said vet Dick Sibley.
“In order to do this you have got to have healthly cows and this may mean investing in cow health. Those with best cow health are making more money.”
Beef farmer Mike Powley stressed the importance of supplying what the consumer wanted as well as being efficient. “Farming has got to revolutionise itself and if we want to be competitive then we have to be supplying what the consumer wants, as well as focussing on animal health and fixed costs.”