Britain’s milk production could increase by 1.4 billion litres a year, putting the eradication of the country’s dairy deficit firmly on the agenda.
That is the claim from consultancy firm Promar, which based its calculations on responses to a survey of farmers’ intentions in which 61 per cent revealed plans to increase herd size over the next five years.
Of these, 40 per cent expected expansion by up to a quarter, and a sixth expected to expand by up to half.
The optimism mirrors that in the beef and lamb sectors, marking a renewed positivity among livestock farmers who have struggled in the face of cheap imports and price cutting.
An EBLEX survey found that 56 per cent of farmers are intending invest in their businesses this year; 62 per cent spending on buildings, 50 per cent on machinery and 47 per cent on their flock or herd.
And the confidence spreads further than the farm gate, with 64 per cent of abattoirs, and the same percentage of auctions marts, said they planned to invest over the coming months, significantly up from 54 per cent last year.
The results came from the annual communications survey, which asked a representative cross-section of levy payers a range of questions about EBLEX work, their business practices and the wider industry, to help inform EBLEX strategies in the future.
EBLEX senior director Nick Allen said: “The survey is just a modest snapshot but it is encouraging that there does seem to be greater optimism there for the future, particularly, it is fair to say, among the larger operators.
“We have had some very tough weather conditions over the last couple of years, among a raft of other challenges, and times remain tough for the sector. Our Stocktake report shows just how tight margins are for many, but businesses can make a good return by operating efficiently, with good husbandry and marketing animals to hit peak industry specification.”
Assuming a growth in milk yield in line with that of the past decade, the Promar report puts dairy farmers on target to reach an average of 7,900 litres per cow by 2020. It also assumes a continuation in the number of farmers leaving the industry.
The UK’s dairy deficit, which currently stands at £1.2billion, has been of concern for some time and is cast in the spotlight again as output in New Zealand – one of the world’s biggest dairy exporters – rises by around 6 per cent after a drought in 2012-13.
However a report on the EU beef market by Rabobank lays out the need for farming to draw up a policy to cope with a predicted rise in dairy beef volumes after EU quotas are abolished in 2015.
Rising milk prices are persuading many farmers to keep cows on rather than selling for beef, an option made even more favourable after quotas are removed.
The resulting glut of bull calves is likely to put pressure on farmers to find new markets as prices fall, the report predicts, an effect already seen in Ireland, where dairy production has been ramped up recently.
The report reads: “Prime beef supplies are expected to come under pressure in favour of dairy-based beef. This is already visible in Ireland, where the number of calves bred from dairy sires increased 5.5 per cent while calves bred from beef sires dropped 7.3 per cent from January to June 2013.
“This will challenge the EU beef industry to source sufficient prime beef and might result in some processor consolidation across Europe.”
Source: Western Daily Press