Growing optimism in dairy sector

DAIRY FARMERS have grown more optimistic over the last six months about the future of the dairy sector, according to a survey by the Milk Development Council.

Only 13% of the 1200 farmers surveyed in October said they intended to leave the industry, compared to 23% in April.

Nearly a quarter of farmers questioned said they were now planning to expand their businesses, 5% more than in April.

But Ken Boyns, an MDC market analyst, said the findings showed a wide split between smaller farms and large farms.

Over one fifth of farms producing less than 250,000 litres annually are expected to abandon milking compared with just 6% of the biggest farmers.

Jim Begg of Dairy UK said: “As they stand these figures are more positive [than previous figures].

“The most positive aspect is that the most committed group are the larger farmers.

“However, you need to see a few more of these [surveys] before you can start to pick out the changing trends.”

The next survey is due in April 2005.

With more farmers intending to stay in milk, the MDC has revised its forecasts for milk production volumes in two years‘ time.

It predicts a drop of 4% from the latest survey results, instead of April‘s figure of a 9% reduction.

But that drop is expected to increase if milk prices remain under pressure, as a growing number of farmers said they would not use the single farm payment to prop up a failing dairy operation.

Citing recent milk price cuts, NFU chief dairy adviser Tom Hind warned that “confidence rests on a knife-edge and could be quite easily knocked”.