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Dairy imports warning as farmers quit
MORE than half of the milk, butter and cheese we eat could be imported by 2030 unless much-needed confidence is injected into the dairy farming sector, a report claims.
According to new research from industry body DairyCo, 14 per cent of dairy farmers intend to quit the industry within the next two years and fewer than 20 per cent said they had the confidence to expand.
The report has sparked further concern about the future of UK dairy farming. The number of dairy farmers operating in Yorkshire has more than halved since the turn of the century and there are now less than 1,000 operating in the county.
The news comes after several weeks of price cuts to dairy farmers as processors struggle to cope with economic downturn.
Huw Thomas, head of market intelligence at DairyCo, said: "If these farmers do what they are saying, UK milk production will fall to 12.1bn litres by the 2010-2011 milk year as there aren't enough farmers planning on expanding their businesses to compensate for the production lost by those leaving. If this trend continues, by 2030 UK production could be just 7.5bn litres meaning over 50 per cent of our dairy products will have to be imported.
"All participants in a supply chain have a vested interest in maintaining it in order to provide the consumer with what they want and make profits from doing so. If the supply chain works together to ensure the chain remains sustainable, then there can be continued investment in increasing efficiency and development of new products throughout the chain, as well as securing future supplies which will help to safeguard against issues of food security and protectionism by other countries."
David Shaw, vice-chairman of the National Farmers' Union dairy board in Yorkshire, said he did not find the gloomy prophecy surprising.
"We have been predicting this for some time. People are leaving the industry at the rate of two a day, production is at its lowest level for 34 years," he said.
"There is no incentive for young people to join the industry and the capital investments are unsustainable. It is really time for the industry to have a sustainable supply chain so that pricing is fairer.
"We cannot have the situation continuing where farmers can have their price changed overnight leaving them high and dry.
"Milk is such a basic food. It is the first thing we drink when we are born and we drink until we leave this Earth."
Mr Shaw, who farms at Elvington, near York, said that action had to be taken now or the UK industry could disappear for good.
The report from DairyCo, a not-for-profit advisory organisation for the dairy industry, goes on to say that while it is normal in other industries, such as steel, oil and coal, for the primary producer to bear the vast majority of the price volatility within a supply chain this would prove damaging to milk production amid current price fluctuations.
The report was published in the same week that Eurostat published its latest figures which showed the UK to account for more than half of the 600m litres fall in milk deliveries across Europe.
Tom Rabbetts, technical and policy adviser at the Royal Association of British Dairy Farmers, said: "The report also highlights the fact in margins that are made at each level of the supply chain, dairy farmers have far higher costs than other areas of the supply chain and yet proportionally they do not receive a fair amount of the retail price.
"This situation must be addressed to boost confidence and hopefully ensure that farmer intentions have no chance of becoming a reality."
MAIN POINTS
More than half of our milk, butter and cheese to be imported by 2030.
Fourteen per cent of dairy farmers say they will quit the industry within two years.
Just 18 per cent of dairy farmers say they have confidence to expand.
Milk production at its lowest level for 34 years.
UK responsible for more than half of the decline of milk quotas across Europe.
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Saturday 26 May 2012
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