Dairy farmer confidence at three-year high

Dairy farmers’ confidence is at a three-year high and could lead to a 5% rise in milk production by 2016, a DairyCo survey has found.

The Dairy Farmer Intentions Survey 2014 showed 58% of farmers were optimistic about the industry over next five years and 62% were optimistic about their own business over the same period.

The numbers of farmers pessimistic about the industry dropped to 8% and fell to 10% regarding their own business.

This renewed confidence comes as the farmgate milk price is holding steady and January milk production hit 1.17bn litres – a 12-year high.

Farmers’ confidence could lead to a 5% rise in British milk production, equating to about 350m litres a year, DairyCo estimated.

AHDB/DairyCo analyst David Swales said the good feeling was obvious, but needed to be seen as a reflection of the mood when the survey was carried out in December.

“There is a lot of optimism, a lot of positive messages at the farmers’ level,” he said.

“I would caveat that it is what the farmers said to the survey at the point in time.

“It reflects their views on milk price and input prices. If those things were to change, their confidence, their views and their plans for the year could change, too.

“It might be that conditions change and farmers may scale back their ambitions. It is a snapshot.”

DairyCo analyst Julie MacLeod revealed the survey results at the AHDB Outlook conference in London on Wednesday 12 February.

The 2014 survey was carried out in December 2013, asking the opinions of 1,060 dairy farmers in Great Britain and 140 in Northern Ireland.

Other key findings were:

  • Over the next two years, 31% of dairy farmers planned to increase production, down 1% from last year, and 54% said they would maintain their current production levels, 11% more than in 2013.
  • Those planning to leave the industry dropped to 4%, down from 9% last year.
  • How much farmers planned to invest was unchanged: in the past five years, 71% of dairy farmers said they had invested in buildings, equipment, land, renewables or diversifications and only 63% said they were planning to do more by 2018.
  • Only 6% said they planned to invest more than £150,000.
  • In a new question, farmers were split over their confidence in the processors’ Voluntary Code of Conduct, which is currently under review by NFU, NFUS and Dairy UK.
  • When asked how confident they were the code benefited their business, a quarter said they didn’t know, 24% said they were confident and 22% said they were pessimistic.

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