Plan business for bright future

DAIRY FARMERS who get a grip on their costs, tailor their production to market demand and cooperate with other farmers are most likely to survive, according to John Sumner, policy adviser for the Royal Association of British Dairy Farmers.

Speaking at a FARMERS WEEKLY Farmer Forum Mr Sumner predicted that in 10 years‘ time there would be less than 15,000 dairy farmers left in the UK.

And, he told the forum at the Smithfield Show, that most of the milk produced in the country would come from less than 10,000 of these producers.

The number of dairy farmers has dropped from 125,000 in 1965 to 22,500 this year and the future will see fewer, but larger dairy farms, he predicted.

In order to grab the opportunities to survive and thrive dairy farmers must first of all get a grip on their businesses and their costs, he said.

“Our survey at this year‘s Dairy Event showed that 60% of dairy farmers don‘t know their cost of production.

“How can you run a business and plan ahead without knowing that?” Mr Sumner said.

The survey also showed that 45% of the farmers questioned, planned to treat the SFP as part of their farming income.

But Mr Sumner urged farmers not to regard the SFP as part of their milk price.

His point was echoed by Farmers for Action chairman David Handley.

Mr Handley said: “For God‘s sake, don‘t use the SFP to top up your milk price. You will be giving it away to ASDA, Tesco and the others.”

Mr Sumner also mentioned animal health and welfare as one area where costs could be driven down, quoting reports showing that production diseases can cost as much as 4p/litre.

Mr Sumner also argued that dairy farmers must get better at tailoring their production to meet market and processor needs and cooperate more with fellow farmers and form alliances with dairy companies and other players.

“There is no White Knight out there who will come to your rescue. The future of dairy farming is in farmers‘ own hands,” Mr Sumner said.

Nonetheless, he did suggest that the government ought to get involved in making sure that there is fair play in the dairy supply chain as a whole.

“The industry needs an OFMILK, a regulator to ensure that it works in a fair and proper way,” Mr Sumner said.