Number of dairy farmers aiming to expand drops (From Darlington and Stockton Times)

Number of dairy farmers aiming to expand drops

10:36am Friday 3rd July 2009

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LACK of confidence in the future of dairy farming continues to grow among producers.

A new survey shows only 18pc of UK dairy farmers plan to increase production in the next two years down from 35pc last year.

DairyCo, a division of the Agricultural and Horticultural Development Board (AHDB), warns it is the lowest figure since it began its Farmer Intentions Survey in 2004.

It says that level of increased production will not cover the loss caused by producers quitting the industry.

As a result GB milk production is expected to fall 4.9pc by 2010-11 to 10.5bn litres.

This is despite the survey showing that almost half of British farmers actually have space available for extra cows.

If all the additional cow spaces were used, British milk production could increase by 5.4pc - almost 600m litres - to 11.6bn litres a year based on current levels.

However, although the capacity for more cows is there, the continued drop in farmer confidence raises serious concerns for the industry.

Helen Eustace, acting head of DairyCo market intelligence said: "It suggests that although milk prices remain relatively high, high production costs and an underlying mood of uncertainty, for example, the current falling milk price, are still undermining farmer confidence."

The survey once again highlights decreasing levels of investment on-farm with nearly 60pc of farmers having less than £25,000 to invest over the next five years.

However, the survey does show that some farmers are looking to the long term and of those planning on staying in the industry for the next two years, 80pc believe their dairy units will still be running in ten years time, suggesting a slowdown in the rate of farmers leaving the industry.

Miss Eustace said: "The survey shows us that dairy farmers of the future will generally be farmers who are already producing a relatively large amount of milk and who are likely to have both invested significantly in the past and plan to continue investing in the future.

"Providing confidence and profitability are sufficient, this suggests there may be a slow down in the rate of farmers exiting the industry."

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