Dairy producer numbers drop below 9,000 for the first time

Dairy producers numbers in England and Wales fell by the highest level for March since 2007, according to the latest AHDB Dairy data.

In total, 73 producers were recorded as leaving the industry at the start of the month, taking the total dairy farmer numbers in the two countries below the 9,000 mark for the first time ever.

See also: How £2.5m dairy unit is aiding better dry cow management

The rate of dairy farmer departures has increased substantially in recent months, with more producers quitting the sector in the past five months, than those that left in the preceding 29 months dating back to June 2016.

But the rate of decline has proven contentious, as the body responsible for keeping the records, the Food Standards Agency (FSA), has said it is recalibrating its database.

The FSA has said it reviews its database of dairy farmers every 10 years and relies on Red Tractor to notify it of leavers in the meantime.

This means the rate of decline may be accelerated now because of the data clear-up, but still means producers have quit dairy in the recent past.

Is this a concern?

We should not be surprised or concerned about the figures, according to AHDB Dairy head of market specialists Chris Gooderham.  

“We are more interested in the volumes of milk being produced than being focused on farmer numbers,” said Mr Gooderham.

In December, the UK produced record volumes of milk despite difficult weather conditions in 2018 and record numbers of producers quitting dairy in England and Wales.

“As long as producers are making a positive decision in quitting the industry, we are not generally concerned.

“It’s when we have a situation like in 2015 when producer numbers and farm profitability drop quickly that AHDB would take action,” he added.

The dairy and livestock analyst added that the situation boiled down to what consumers wanted and would be willing to pay for.

“There is a drive for cheaper food and that is pushing the supply chain to get more and more efficient, but this direction of travel does not lead to a horrendous future for dairy,” said Mr Gooderham.

Problems with where we are heading

Despite the continual decline in dairy producer numbers, the national herd and production figures show that those animals being sold are reincorporated in fewer, larger farms.

The issue with this compaction is that larger units rely more heavily on labour, which is particularly scarce at the moment, according to NFU dairy board chairman Michael Oakes.

“Bigger isn’t always better and a big unit still has to achieve a margin,” said the dairy farmer.

Mr Oakes added that there is a real danger of looking in isolation at these headline figures and ignoring which types of farms are going out of business.

“If farmers are quitting because they are retiring and do not have a succession plan then that is good for the industry,” he said.

“But I am increasingly seeing farms that have heavily invested in recent years putting everything up for sale, including large units.

“We need to make sure what we think is happening is actually happening,” he added.

“If a farm has invested in the past few years, they were not planning on quitting the industry now, were they?” said Mr Oakes. 

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