29 September 1995

Think long-term now

DAIRY farmers must think beyond everyday milk production to devise long-term "blueprints" for their businesses to secure both their markets and their future, said ADAS.

Launching its latest report, Blueprints for Business, at the European Dairy Farming Event on Wednesday, ADAS insisted that UK milk producers must strengthen their businesses if they are to remain competitive in the changing world milk market.

Although world milk prices will rise during the next decade to 15-20p/litre, there will be downward pressure on the UK milk price, the report predicted.

At the same time, the US and UK markets will converge, with the US becoming a major competitor in the world marketplace, said ADAS. Its dairy industry is currently showing an annual growth of 3%, while the EU industry is capped by quotas.

The ADAS blueprint looks at five key areas of a farmers business and creates an individual plan for that farm to improve business performance and growth:

&#8226 A review of the farms current position.

&#8226 Establishing the genetic status of the herd and improving it by selecting animals of high genetic merit, concentrating on those traits of greatest economic importance.

&#8226 Developing a quota strategy which is right for the business, only investing in quota if it will increase profit.

&#8226 Choosing the right milk marketing policy for the business, based on achieving the best milk price.

&#8226 Formulating a diet specification to meet milk targets.

"For dairy farmers to be successful they must be increasingly aware of the changes taking place in their market place. They must also strengthen and adapt their businesses to improve their competitiveness. They need to have long-term plans to fit their circumstances – a blueprint for their business," said Mr Sumner.

John Sumner – the UKdairy industry faces a major challenge.