26 September 1997

Will 7000 producers rule market by 2000?

JUST 7000 dairy producers will be producing more than half the UKs milk by the year 2000. These producers are likely to have in excess of 700,000 litres of quota, a yield a cow of more than 7000 litres, and a PIN of £70 or higher for replacement heifers.

That was the prediction of John Sumner, head of ADAS dairy sector, speaking at the launch of the companys Blueprint 7000 document.

"Reduced competition for milk and the strength of sterling have combined to cut the milk price by 3-4p/litre compared with 1996 – a revenue loss to UK dairy farmers of some half-a-billion £," said Mr Sumner.

But the fall in milk prices would create opportunities for strong, well managed businesses to grow. Those that met its Blueprint criteria could still achieve profits of £55,000 a year, said John Allen, previously dairy business development manager, but who succeeds Mr Sumner as head of the dairy sector.

The net profit for average producers was forecast to fall by about 3.6p/litre, from 6.2p in 1995/96 to just 2.6p/litre in 1997/98. For the efficient producers in control of their costs, net profits were forecast to fall by 2.9p/litre to 7.8p/litre in 1997/98. For such producers, with 700,000 litres of quota, profits are still predicted to be about £55,000 – £30,000 more than the average producer, he said.

&#8226 Wiltshire farmer Robert Mallet, milking 146 cows at North Leaze Farm, Highworth is winner of the ADAS Blueprint 7000 award.