Dairy exodus has slowed – MDC

THE EXODUS of UK farmers from the dairy industry has slowed, according to a survey by the Milk Development Council.

Losses are still high with about 5% of milk producers planning to give up dairying in the next two years.

But that represents a slowing of 8% in the rate of departures. And that equates to 1000 fewer farmers planning to leave the industry compared with the previous 12 months.

Head of MDC Datum, Ken Boyns, said: “Our six monthly survey shows farmers are less negative than when previously questioned with increased numbers planning to remain in milk production and expanding.”

Mr Boyns told FARMERS WEEKLY that strong negotiations through 2004 had led to more stable milk prices.

“The dairy premium to be rolled into the single farm payment from this year is no doubt another major factor encouraging people to stay.”

The MDC survey, which is carried out every six months, showed that nationally 45% of farmers plan to keep their businesses running at current levels and just over a quarter plan to expand their herds.

Farmers are less pessimistic about the price they will receive, with 21% expecting prices to stay the same or improve on the past 12 months, said Mr Boyns.

But he warned that the improvements should not be allowed to portray too rosy a picture of the industry.

The 21% who are optimistic are still outnumbered by the 36% who said they had no idea where prices would be after CAP reforms are implemented, Mr Boyns said.

“If prices did fall, the number of farmers quitting would increase quickly. And in certain areas large scale decline is still expected.”

He pointed to the predicted 17% of dairy farmers planning to leave dairy farming in the south east in the next 24 months.

Farmers in the south east face higher production costs and more alternatives to dairying, which is a major reason for the continuing departures in the region.

SURVEY RESULTS

PLANS FOR BUSINESS
45% Stay the same
26% Expand herd
24% Unsure
5% Leave industry

VIEW ON PRICES
36% No idea what prices will do
21% Prices the same or better

REASONS FOR LEAVING
82% Poor prices
12% Retirement