16 March 2001

25% of producers set to change their milk buyer

By Jeremy Hunt

MORE than one-quarter of the UKs dairy farmers intend to change their milk buyer, even though 20% believe they will not get a better price, reveals a survey recently undertaken by Lancs-based Pye Farm Feeds.

The survey, which covered 1400 producers milking 150-200 cows throughout the midlands, northern England and southern Scotland, shows a clear desire to create a more cohesive union of dairy farmers in the UK.

Haydn Davies, the companys marketing manager, says the number one priority for producers is milk marketing. "They are not necessarily looking for a better price package, but clearly want to achieve a less fragmented system. They want to stick together and achieve greater co-operation in the way they do business with the market."

About one-third of producers questioned said they were running their businesses at break-even point and one-quarter were making a margin of 1p or less a litre of milk produced.

High input-high output systems were widely favoured by producers taking part in the survey. At least 25% said they intended to spend more on feed in the coming months.

"But the critical factors in choosing feed are also changing. Quality, performance and price are the big three, but more producers are assessing raw material inclusions," says Mr Davies.

"Even as recently as three years ago, we would not have expected to see ingredient analysis play such a big part in the decision making process.

"When it comes to investment, 58% of those surveyed said they have invested in the farm in the past 12 months. About 60% have committed funds to invest in quota and machinery, while fewer than 4% have invested in diversification."

Looking to the future, 63% intended to invest in the coming year with more committing funds to buildings and farm infrastructure than to anything else. Fewer than half are intending to invest in milk quota and machinery and just one-quarter plan investing in livestock.

But the survey also showed that more producers are looking into diversification options, with 7% planning to spend more than £100,000 and more, and half committing less than £25,000.

"There are still difficult times ahead for the dairy sector, but its a positive sign that two-thirds of producers stated that they were committed to staying in dairy farming," says Mr Davies.

"They are investing in their business, opting for maximum output and carefully managing their costs." &#42

DAIRYSURVEY

&#8226 Many changing buyer.

&#8226 Spending on feed.

&#8226 Investing in quota and machinery.