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Farmer Confidence Falling

Farmer confidence still falling but some say they're in it for the long term....

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Farmer confidence still falling but some say they’re in it for the long term….

The 2009 DairyCo Farmer Intentions Survey highlights a fall in farmer confidence from last year with the lowest level of dairy farmers intending to increase milk production seen since the survey began in 2004.

Only 18% of UK dairy farmers are planning to increase milk production in the next two years – down from 35% in last year’s survey. This will be insufficient to cover the loss of production from those farmers intending to leave the industry and, as a result GB milk production is expected to fall 4.9% by 2010/11 to 10.5 billion litres.

This is despite the survey showing that almost half of British farmers actually have space available for extra cows and that if all the additional cow spaces were full, British milk production could increase by 5.4% – almost 600 million litres – to 11.6 billion litres per annum based on current levels.

However, though the capacity for more cows is there, the clear drop in farmer confidence that the survey highlights compared to last year raises serious concerns for the industry. Helen Eustace, acting head of DairyCo market intelligence explains: “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 60% 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, 80% believe their dairy units will still be running in 10 years time, suggesting a slowdown in the rate of farmers exiting the industry.

Miss Eustace says: “The survey shows us 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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