Life turns sour for dairy industry

The main UK farming unions have warned that the dairy industry is facing an extremely challenging year on the back of spiralling production costs and variable milk prices.

AHDB research indicates that the milk to feed price ratio for some producers has fallen to a level which has led to reductions in milk production and unions warn that supplies to dairies could fall.

“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,” said NFU Scotland milk committee chair, Gary Mitchell.

He said that for too long dairy farmers in the UK had been asked to produce a quality product at unsustainable prices.

“The whole supply chain from cow to consumer must recognise the severity of this situation.”

English NFU dairy chair, Michael Oakes said even those on the best contracts were struggling to keep up with rising bills.

“For those on the least favourable contracts, we know it means that many may consider cutting production or leaving the industry.”

Though milk prices had risen recently, he said that those on certain contracts had been suffering protracted losses which were ‘unsustainable’.

UFU dairy chairman Mervyn Gordon said producers were facing the challenge of constantly rising input costs which impacted on the profitability of many dairy farms.