JOURNAL : Farmers Weekly
SUBJECT : Dairy expansion
AUTHOR : O Cooper
SECTION : Business
ISSUE DATE : 13/09/06
PAGE NUMBER : 1
COPYRIGHT : Free reuse
HEADLINE: Don’t delay reinvestment
TEXT: Dairy farmers seeking to reinvest should do it now, according to consultant Laurence Gould Partnership.
With low quota prices and interest rates, the net milk price was higher than it had been for the past 10 years, said consultant Claire Kingston. “In 2006 the milk price net of bought quota has been 17.16p/litre, compared with just 9.72p/litre in 1997,” she said.
Producers should therefore stop using current prices as an excuse for inaction. “Too many people are sitting on the fence. But from hereon in it is probable that the single farm payment will fall and you will need to plan.
“There are a number of profitable dairy businesses and for those who see a future in the industry, now is a good time to reinvest.”
Increasingly, dairy farmers were seeking to set up share-farming or contracting agreements as a cheap way to expand, said Miss Kingston.
“In the past two or three months we have come across three opportunities for dairy farmers and one for goat farmers – having never seen them before.”
As more farmers sought to retire or step back from dairy production, there were increasing opportunities for younger producers to expand, said Miss Kingston.
“This way the landowner retains their tax benefits – it can be a very attractive proposition for all concerned. These arrangements are going to be a greater feature in the future.”