Dairy facing “extremely challenging year”, unions warn
3rd June 2021
Spiralling production costs and variable milk prices have prompted farm leaders to warn that dairy farmers are having to produce a quality product at unsustainable prices.
The warning from the UK’s four farming unions comes as AHDB’s new analysis reveals the milk to feed price ratio for some producers is at a level that has historically led to reduced milk production.
NFU Scotland milk committee chair Gary Mitchell said: “I know a number of farmers in Scotland and further afield were receiving below the UK average farmgate milk price for April 2021. The AHDB data is clear; milk supply is likely to suffer if this trend of cost to income is not rectified.
“For too long dairy farmers in the UK have been asked to produce a quality product at an unsustainable price – one which inhibits on farm investment and a profitable return for the primary producer. The whole supply chain from cow to consumer must recognise the severity of this situation.”
NFU dairy board chair Michael Oakes added that even those on the best performing contracts will be struggling to keep up with rising bills. Whereas for those on the least favourable contracts, it will mean cutting production or leaving the industry for some.
“Milk prices may now be improving slightly, but those on certain contracts will have been suffering losses for a while now, which is unsustainable,” he said.
NFU Cymru milk board chair Abi Reader noted the cost of complying with a huge array of standards to meet consumer demand and continue supplying the UK’s safe and trusted dairy products. “Although those standards are very important to our industry, it comes at a cost and those producers with milk prices below average will be hardest hit.”
She added: “A current case in point here in Wales are the extra costs of meeting Water Regulations recently introduced by the Welsh Government and the steep rise in building material costs across industry post-Covid, not to mention feed and fertiliser input prices.”
Ulster Farmers Union dairy chairman Mervyn Gordon said that in Northern Ireland, farmers are facing constantly rising variable input costs, which is “seemingly relentless” and impacting upon the profitability of many dairy farms.
“This expands beyond traditional dairy inputs to include many general and capital items needed to run a viable dairy enterprise,” he concluded.
