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UK dairy industry faces uncertainty as 10% of producers contemplate exit by 2025, small farms most vulnerable

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An NFU survey reveals that nearly 10% of dairy producers in the UK are considering discontinuing milk production by 2025. Among these, smaller producers are anticipated to bear the brunt of the existing market conditions.

According to the NFU’s 2023 Dairy Intentions Survey, which involved nearly 600 dairy farmers in the UK, a combination of inadequate profits, unpredictable markets, and the substantial on-farm investments needed, have collectively influenced the contemplation of numerous British dairy farmers regarding their continuation in the industry. Notably, the NFU stands as the representative body for over 46,000 farming and growing enterprises in England and Wales within the UK.

An additional 23% of milk producers have expressed uncertainty about their prospects for continuing production in the coming two years. As outlined in the survey, smaller businesses that yield less than 1 million liters of milk annually are at a higher likelihood of ceasing production before March 2025, in contrast to those generating larger quantities.

Data provided by the Agriculture and Horticulture Development Board (ADHB) indicates that there are approximately 7,500 dairy producers in the UK at present. This number has experienced a decline of 4.8% since the previous year, as reported by the NFU.

The results also indicated rises in input costs such as feed (84%), energy (83%), and fertilizer (74%), which are all areas of significant concern.

A notable 52% of producers are halting production due to the substantial investments needed to ensure their farms’ compliance, including factors like slurry storage. This particular issue is highlighted as a concern by 91% of producers when evaluating the possibility of expanding production in the future.

NFU Dairy Board chair Michael Oakes, said, “With increasing global demand for British dairy, we know that the long-term future is bright for our sector. To ensure we maximise this potential, it’s imperative that government continues to work with us to ensure we have the right environmental, regulatory and trade framework in place to support the production of high quality, nutritious and sustainable food.”

New industry-wide contract regulation expected to come in later this year, as announced by the government in July, “must support fairer, more transparent and accountable supply chains,” Oaks added.

The proposed regulations would empower farmers to contest prices, hinder alterations to contracts without their consent, and simplify the process for farmers to express their concerns.

SnackTeam
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