High input costs risk the future of dairy farming, warns charity

Poor farmgate milk prices and high input costs could lead to a tough winter for dairy farmers, according to the Royal Association of British Dairy Farmers (RABDF).

The charity says the cost of production is currently estimated between 40p/litre and 45p/litre, well above Defra’s average UK farmgate milk price of 36.11p/litre for July.

The RABDF warned that dairy farmers were facing enormous financial pressures and there were few signs of an uplift in the near future.

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RABDF chairman Di Wastenage said the difference between the farmgate milk price and retail price was a very live issue for farmers.

“They are caught in the crossfire, with farmgate milk prices remaining low, while farm input costs are stubbornly high and high retail prices impact consumer demand too,” she said.

“We recognise UK processors also continue to face high energy and labour costs, which are reflected in these results.

“The key difference in the current retail price of cheese is because it is manufactured using higher-cost milk from earlier in the year,” she said.

The outlook for the next six months on global markets was not showing many signs of support for UK dairy, Ms Wastenage added, with reduced Chinese demand for whole milk powder and a bearish view from the New Zealand-based dairy co-operative Fonterra.

Ms Wastenage stressed that the UK needed a dairy industry that operated efficiently and was profitable for all sectors of the supply chain.