Decline in demand sees Guernsey dairy cut production by 10%

Channel island-based milk processor Guernsey Dairy has announced plans to cut production by 10%, due to falling demand.

The state-backed processor is contractually obliged to take all 8m litres of milk produced by Guernsey’s 1,450 milking cows on 13 dairy farms each year.

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But as plant-based alternatives to milk continue to capture market share, the processor says it needs only 7m litres to supply demand.  

Guernsey Dairy general manager Andrew Tabel said the production cuts would be carried out in a phased approach, with farmers still paid the same amount per litre.

While the exact price paid per litre is not disclosed by the dairy or Guernsey government, producers have received increases over the past two years. In 2019 dairy farmers received a 4.5p/l increase, with a further 2% rise at the start of this year.  

Guernsey Dairy has also launched an efficiency drive with targeted cost savings of £125,000. The savings will be made in transport costs and energy and water consumption at the St Andrews processing facility, where the dairy has been based since 1951.

The site is badly in need of improvement and the States’ Trading Supervisory Board (STSB) suggested an upgrade could save a further £500,000 a year.

The Guernsey government is considering proposals for a £25m investment, with the preferred option a brand new site and visitor centre to be constructed by 2024.

In the meantime, farmers on the island are looking to boost their environmental and welfare credentials and better promote the health benefits of milk to the public.

A farm development programme is under way that will see:

• all dairy products branded RSPCA Farm Assured by mid-2021, with farms given until 31 December 2020 to achieve compliance
• a transition to LEAF scheme accreditation
• a timeframe agreed to become 100% A2/A2 status
• improved engagement with customers
• continued support for understanding of the dairy industry through education, farm and dairy tours, and school visits.