18 June 2009

2 minute read

Europe

Milk production last year was the lowest since 1971 but further falls are forecast that could take production to its lowest level for a staggering 48 years.

According to the DairyCo survey, fewer than one in five British dairy farmers are planning to increase milk production in the next two years and those expanding will be insufficient to cover the loss of production from those farmers intending to leave the industry. As a result milk production is expected to fall by a further five percent next year to 10.5 billion litres. The last time milk production fell below 10.5 billion litres was the 1960/61-milk year.

The collapse in milk price this spring coupled with higher prices for inputs such as feed, fertiliser and fuel, has severely dented dairy farmer confidence with the lowest level of dairy farmers intending to increase milk production seen since the survey began in 2004.

NFU Scotland believes this raises serious concerns for the industry. NFU Scotland Vice-President Allan Bowie said:

“This latest survey suggesting that milk production in Britain could fall to its lowest point for almost half a century must set alarm bells ringing throughout the whole dairy supply chain and ask questions as to what shape we want the dairy industry to take in the future.

“There are huge opportunities out there for all players – producers, processors, and retailers - to drive the industry in the UK forward and build on the growing demand for fresh milk and dairy products – both here and abroad.

“However, the nature of our supply chain relationships have, in part, been destructive to the point that we are on the verge of our dairy industry losing its way. Confidence at farm level is significantly lower than a year ago and will not have been helped by the recent collapse of a major dairy co-operative. Falling milk prices provide little incentive to continue or increase production and untold damage is being done at farm level.

“The annual DairyCo surveys have, in the past, been an accurate snapshot of how farmers view their future in the sector. This latest survey shows that our heritage as a dairy farming nation, where we can compete with the best in Europe, is being undermined by those who fail to share in the vision that all parts of the milk and dairy chain deserve a fair price for their efforts. Unless this is addressed soon, the amount of milk produced in this country and parts of our industry run the risk of dribbling down the drain.”

TheCattleSite News Desk