Scottish milk production set to expand despite uncertainty

Milk volumes in Scotland will continue to grow as a third of dairy farmers are planning to expand, according to the results of a survey assessing current sentiment

The Scottish Dairy Hub, dairy market analyst Chris Walkland, and Kite Consultancy conducted the review and revealed the response at AgriScot on Wednesday (20 November).

Of more than 125 respondents, a third are intent on expansion, mostly by up to 10%, while two-thirds aim to keep output the same. Only 7% are looking to cut volumes.

See also: How a dairy farmer cut the use of soya bean meal in rations

About 30% of farmers said they are “very confident” or “confident” to invest in the short-term, with the same proportion saying they have “no confidence” to do so.

In comparison to 2016, when milk prices crashed, a third said their businesses are stronger but two-thirds believe their businesses are unchanged.

Looking ahead, 60% stated their businesses will be about the same or better off after Brexit.

When asked about the direction of travel for the Scottish dairy industry, more than 60% said they are “not so confident” or “not at all confident”, with just over 15% “extremely” or “very” confident.

David Keiley, Kite Consulting’s senior adviser in Scotland, said the survey results reflect the need for a clear future strategy in light of present challenges.

He said: “Scotland has a very polarised milk field, with some farmers getting very good milk prices, but most not.

“A lot of businesses have been cash negative for a while, and that is putting a lot of pressure on them.

“Many are on a knife edge currently having to deal with increasing overdrafts, higher levels of debts per cow and creditor burdens.”

‘Indefensible’ NI milk price

The Ulster Farmers’ Union (UFU) has condemned two local dairy processors for the “indefensible” decision to cut the base milk price while farmers are struggling to cover their overheads.

Dale Farm’s price for October has decreased by 0.25p/litre to 24.24p/litre, and Glanbia Cheese has also reduced its price by 0.25/litre, to 23.75p/litre.

The difference between milk prices in Northern Ireland and Great Britain is now more than 3p/litre, which the union has described as “scandalous”.

Victor Chestnutt, UFU deputy president, said: “This milk price drop is a further kick in the teeth for our dairy farmers and is having a serious impact on farming businesses.

“If dairy processors are paying their producers on the back of what a balance sheet is dictating rather than the market price, it is a damning indication that the milk price calculator in Northern Ireland is beyond repair.”

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