26 January 1996

Smaller dairy farmers set to leave industry at faster rate

THE rate at which small dairy farmers leave the industry will quicken, David Jones, Milk Marques head of planning, told the MLCs Outlook conference.

Agricultural policy will look at ways of reducing the value of quota, he said.

Capitalise on value

"And this will quicken the dem- ise of small farmers as they try to capitalise on the high values." Deregulation of the milk industry saw a brief slow-down in the long-term trend of declining producer numbers, he said. "But the annual rate of decline over the next four years will be approaching 4%.

By the turn of the century, the average herd size will be 83 cows, each yielding just over 6300 litres, he predicted.

Quotas would probably exist until between 2005 and 2010. No reduction in quota values was likely to be seen next year, he predicted. And combined with rising costs – and a small lift in the milk price – this would lead to a small fall in dairy farmers margins.

Herd downward trend

Deregulation also led to a short-term increase in cow numbers, he said. But the longer- term downward trend has now resumed, and the total herd would be about 1.78m head by the year 2000. &#42