Livestock 2013: NFU outlines vision for dairy sector growth

The NFU has published its vision for the British dairy industry which centres around increasing domestic production and processing to enable the UK to compete better in the global market place.

The union’s vision, unveiled on the opening day of the Livestock Event at the NEC, Birmingham (3 July), predicts a bright future for the sector if opportunities for growth equivalent to four to five billions litres are seized.

The report says the British dairy industry is in pole position to become a national and international success story, if farmers and stakeholders work together towards a common goal.

Key ingredients for success are identified as major investment in processing infrastructure, a move to more equitable contractual relationships and a further improvement in the efficiency of some dairy producers.

The vision describes the UK as having an “already efficient, but potentially highly efficient dairy farm base.” But it suggests analysis of DairyCo’s MilkBench + figures shows if the bottom 25% of producers in terms of efficiency were to achieve the technical performance of the average, output would increase by 7% or 0.8 billion litres (in Britain).

The NFU also argues that if farmers are paid a market price that allows for an on-going sustainable investment in capital infrastructure of 3.5ppl and there is a commitment to equitable contracts – the combination of efficiency gains, farm expansion and new entrants could allow output to expand to the required levels.

NFU dairy board chairman Mansel Raymond said population growth and consumption trends suggest the global and domestic dairy market will grow which offers farmers prepared to invest opportunities.
But he added: “Growth at farm gate can only happen in conjunction with increased processing capacity. While much has been said about investment in liquid milk processing, growth will also require more state-of-the-art processing capacity for other dairy products.
“With this vision and strategy I want to unite the industry in increasing our domestic production and processing. Farmers and processors need confidence in each other’s will and ability to invest and produce what the market wants and seize these opportunities.
“We believe that to trade globally, you need to compete globally; that’s the basis for ‘Compete to Grow’ our vision and strategy for a growing British dairy industry.”

Key messages:
• The next 5-10 years presents a major growth opportunity for British dairy farmers, if we don’t take advantage of it, other countries will
• British processors must seize opportunities for domestic and global market growth
• To grow, farmers and the whole supply chain will need to be competitive
• For farmers to be competitive, they will need to invest. The supply chain must recognise the scale of investment that farmers will need to make
• For farmers to invest they need trust in the supply chain
• The foundation for that trust must be equitable contracts, which comply with the Dairy Industry Code of Best Practice for Contractual Relations and fairly reward farmers for their investment and quality output
• There must be a greater share of supply chain margins for farmers’ investment and profitability, in reward for quality output

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