Dairy farm businesses under threat, according to NFU survey

By Nicky Godding

16 August 2023

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Britain’s dairy farmers are being forced to think seriously about their future due to concerns over insufficient returns, volatile markets and the scale of on-farm investment, a new NFU survey shows.

The survey of nearly 600 dairy farmers’ intentions by Warwickshire-based NFU reveals nine per cent of producers believe they are likely to stop producing milk by 2025 – up from seven per cent last year. A further 23 per cent said they were "unsure" if their business would continue producing milk beyond 2025.

87 per cent of dairy farmers who responded said they are concerned about the impact of government regulation, with feed prices, energy prices, cash flow and profitability other key factors that would curtail milk supplies.

Meanwhile, 91 per cent of dairy farmers said the main factor to them increasing milk production would be the scale of investment needed for things such as suitable slurry storage to ensure their farms are compliant - this supports the NFU call for Defra’s Surry Infrastructure Grant to be extended to cover more areas and to lower the minimum spend threshold needed to access the funding.

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.

“The results of this survey show that, now more than ever, we need resilient and collaborative dairy supply chains. It’s vital we reverse this trend of boom or bust and invest in our supply chains. New industry-wide regulation on contracts, expected to be introduced later this year, must support fairer, more transparent and accountable supply chains. But regulation isn’t a silver bullet.

“With increasing global demand for British dairy, we know that the long-term future is bright for our sector. To ensure we maximise this potential, it’s imperative that government continues to work with us to ensure we have the right environmental, regulatory and trade framework in place to support the production of high quality, nutritious and sustainable food.”

By Nicky Godding

Nicky Godding is editor of The Business Magazine. Before her journalism career, she worked mainly in public relations moving into writing when she was invited to launch Retail Watch, a publication covering retail and real estate across Europe.

After some years of constant travelling, she tucked away her passport and concentrated on business writing, co-founding a successful regional business magazine. She has interviewed some of the UK’s most successful entrepreneurs who have built multi-million-pound businesses and reported on many science and technology firsts.

She reports on the region’s thriving business economy from start-ups, family businesses and multi-million-pound corporations, to the professionals that support their growth and the institutions that educate the next generation of business leaders.