Over three-quarters of British dairy farmers will earn no more than £20,000 for their labour in the 2009/10 milk year, a new report from DairyCo suggests.
Despite this, many producers remain optimistic and at least one in two expects to invest significant sums of money in the business within the next five years.
In an exclusive first look at DairyCo’s latest Farmer Intentions Survey, it was revealed that almost all respondents would earn less than the national average wage of £26,629 in the 2009/10 milk year.
Indeed, just 23% of the 500 who responded reckoned they would pay themselves over £20,000, while over a third, mainly smaller producers, expected to receive no more than £10,000.
On an hourly basis, dairy farmers are left trailing well behind the average British worker who can expect to earn £14.45 an hour based on a 33-hour working week.
Most respondents worked almost twice that number of hours, and half said an 80-hour week was normal. This left two-thirds of farmers earning a maximum of £5 an hour, and fewer than one in five more than £7 an hour.
The survey notes that some farmers’ household bills might be paid as part of the farm business. This could reduce a farmer’s outgoings in this area, effectively boosting income.
Nevertheless, even adding £15,000 for rent for a good house plus fuel bills to a £20,000 wage would still leave a “better-off” dairy farmer earning just £11 an hour.
“Despite the long working hours, the survey suggests that working hours have little or no impact on a farmer’s decision on their level of future milk production,” said DairyCo chief executive Ken Boyns.
The highest earners – £20,000 plus – were more likely to expand and pay more to do so. While most respondents intended to invest more than £25,000, well over half of the bigger producers were aiming for £50,000 or more.
“It is also encouraging to see that one in 10 producers said they planned to spend at least £250,000 in the next five years,” said Mr Boyns. “This could reflect the fact that we have had two years of slightly higher prices for some, who now feel able to invest more in their business.”
Plenty were also looking to the longer term, with 62% having additional pension provision. Average contributions stood at £154 a month.
However, four out of 10 farmers over 60 would have to rely on the state pension, forcing them to work longer, sell off assets or rely on other family income, which could add to business and family pressures.
“Despite the fact that dairy farmers obviously work longer hours than other industries and for lower pay, it is encouraging to see that an increased number of succession plans identified in the survey suggests the sector is still attracting new blood,” said Mr Boyns.
“Clearly, continued positive support from dedicated supply chains and better milk prices will be needed to continue to attract new entrants, and to give others the confidence to invest.”
More details of the report, released next week, on this site on 9 April..