Almost a quarter of dairy farmers are “unsure” if they will continue producing milk after 2025 due to low prices not covering their costs and meaning they are unable to invest in the future.
The survey of 600 farmers, by the NFU, found nine per cent of farmers said they are “likely” to stop producing milk by 2025, while 23 per cent said they are “unsure” if they will continue.
NFU dairy board chair Michael Oakes said: “It’s clear that significant inflationary pressures combined with below cost of production prices are continuing to put the resilience of British dairy farming businesses under threat. We are now facing a crisis of confidence among Britain’s dairy farmers.”
It comes as the government has begun a series of supply chain reviews across several farming sectors, including dairy, to assess future viability, fairness and security. Farmers in the UK have faced unprecedented increases in the cost of energy and other farm inputs, alongside flat returns from processors or supermarkets, which have forced many, including in apples, berries, eggs and dairy, to begin giving up.
Last month, the government announced that under a new Dairy Code of Conduct, new regulations will mean farmers will be able to challenge prices and more easily raise concerns with supply contracts, helping ensure they receive a fair price.
Responding to the announcement, executive director of the Food Ethics Council, Dan Crossley, said: “At a time when so many farmers are leaving the dairy sector, we welcome further details being announced about supply chain regulation. We and many others have been calling for a robust, properly enforced dairy code of conduct.
“We urge the UK government to step up the urgency in bringing in this code. How many more examples of unfair dealings and power abuses will there be, and how many more dairy farmers will have gone out of business, by the time this regulation is fully introduced?”
In Wales, organic dairy farmers are being simultaneously hit by a withdrawal of government funding, which they say will lead to the collapse of many small scale organic dairy farms. Funding for organic farmers in Wales will end in 2024, with no direct replacement under the the new post-Brexit agri-environment schemes, which are open to any farmer.
Welsh organic dairy farmer and chief executive of the Sustainable Food Trust, Patrick Holden, said: “As one of Wales’s longest established organic farmers, having just celebrated our 50th anniversary of farming using organic principles and practices, I believe that the decision to withdraw support payments will inflict long-term damage, not just on the organic sector but on Welsh agricultural community as a whole.
“This decision may represent the final straw for a number of small family dairy farms.”
For more on fairness and the impact on dairy, look out for the next print issue of Wicked Leeks, out 28 August.