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Farmers, are you staying in or getting out of milk production?

FOLK2FOLK

Looking at the 2022 calendars for the main dairy auctioneers, the number of dairy dispersal sales shows no sign of abating.

This is not a new phenomenon; back in 1974, Hansard reports that during the final quarter of the year 109,712 farmers took the dairy to beef conversion grant. Anecdotal evidence suggested that in the ’90s an average of two dairy farms stopped producing milk every day. In 2020 the number of milk producers contracted a further 3.7% on the previous year although the volume of milk increased from 1.5m to 1.56m litres.

There are many reasons why a dairy farmer may consider stopping producing milk:
  • Personal circumstances: Age, ill health, or perhaps no successors.
  • Social reasons: There are now fewer farms left within a village and over the years, local communities have evolved to include more affluent, out-of-area “incomers” keen to enjoy their bucolic country lifestyle without the whiff of slurry or having to reverse for farm vehicles in the lanes!
  • The economics of it: The Old Mill/Farm Consultancy Group Milk Cost of Production Report 2020 records that “the top 10% of milk producers again outperform the bottom 10% by over £1,000 per cow despite income levels only being £142 per cow higher”. So, to make it work, you’ve got to be in the top 10% of producers, and to do that you need to have invested, got the tech, and have the good buildings.
  • Increased regulation: Statutory regulation, farm assurance, and meeting the high and stringent requirements of your milk buyer. If you want a 5-star milk contract you need to be a 5-star producer.
  • Lack of Investment: Farms have not generated sufficient income to keep upgrading facilities.
But there’s still opportunity if you’re willing to make the necessary investment

Major advances have been made in every aspect of dairy farming, genetics, plant breeding, nutrition, and the adoption of technology.  Grazing systems have become more refined as demonstrated by the sight from the M5 in-mid January of a milking herd at grass in the daytime. However, modern infrastructure is needed to benefit from such advances.

FOLK2FOLK is a proactive supporter of the farming industry. So far, in these opening weeks of the year, we’ve approved finance for three farmers to purchase strategically placed land which will enable more efficient utilization of existing grassland. Another loan has been made to an expanding dairy farm to increase and upgrade the present cow accommodation.

So what are you doing to ensure the milk tanker will still come down the drive in 2025? And can we help you?

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