GB dairy farmer numbers in sharp decline

The number of dairy producers in Great Britain has fallen to 7,500, as the impact of high costs and falling milk prices has forced some to quit the industry, according to the AHDB.

The levy body’s most recent survey of major milk buyers reveals there were 380 fewer dairy producers this April compared to 12 months ago – a fall of 4.8%.

Since the AHDB’s last survey was completed in October, 350 dairy producers have exited the industry – a fall of 4.5%.

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Writing in an online blog, Tom Price, a trainee analyst at AHDB, said despite the latest Agricultural Price Index indicating input cost inflation has eased, input costs remain historically high.

Squeezed margins

This, in combination with falling milk prices has squeezed profit margins for many dairy farmers, he added. High cull cow prices and uncertainties about future farm support has also led some producers to change their future direction.

Despite the drop in dairy producers over the past 12 months, the AHDB says milk volumes per farm remain high, with the average GB dairy farm producing 4,500 litres a day, equivalent to 1.65m litres a year.

But the NFU says falling milk prices are putting dairy businesses under pressure and production levels will be unsustainable if prices are not reversed. This could lead to milk shortages in the autumn, the union has warned.

Milk prices have dropped below the cost of production for many dairy enterprises, with values in May almost 30% down on the beginning of the year.

Most businesses are being paid 32-40p/litre, with costs of production lying around the mid-40s.