Dairy farmers urged to reflect on ability to face milk price crisis

Dairy advisers have promised to “break the taboo” and help struggling farmers shake up their businesses — or quit the industry.

Addressing a Dairy Allied Industries Forum at Stoneleigh Park on Tuesday (15 March), AHDB Dairy strategy director Amanda Ball said leaving the industry had been a “taboo subject”, but was now the reality for more and more farmers.

She presented research showing about half of British dairy farms were financially vulnerable in December, meaning they could not cover their cash costs. This would likely have worsened in the first three months of 2016, she said.

Only 15% were classed as “long-term sustainable”, which meant they covered their full economic costs.

See also: Milk price pain hurting ‘efficient’ dairy producers

One solution proposed by consultants, accountants and bankers attending the forum was to establish a hotline to point farmers towards the best professional advice.

They will also publish a list of 12 tough questions that would push farmers to reflect on whether they were fit to face the current crisis and keep dairying in the future.

Barclays head of agriculture Mark Suthern said farmers needed “sensible realism”. He said banks wanted to see a “plan A”, but also a “plan B”.

“If you have been trading profitably for the past 20 years and this is just a blip, then we will continue to support you. But if you are making losses when the milk price is high, then where are you going to go?”

All the industries represented said they were surprised at the lack of extra demand for advice, despite the brutal market conditions. The only ones to notice a major change were feed firms, who had extended their lines of credit.

Farm Community Network chief executive Charles Smith said there were psychological barriers to farmers making dramatic decisions about their future.

“There is a fear of change and family pressure to keep going. Often they will not call [our helpline] until the bailiffs come down the road.”

OCTOBER
29

Farm succession planning during the Covid-19 crisis

Register now