Farmers' glass half full
Oct 5 2009 by Karen Dent, The Journal
DAIRY farmers are showing greater confidence in the future of their businesses, despite uncertain prices in the world market.
The more positive view was revealed by a survey carried out by Barclays at last month’s Dairy Event and Livestock Show at Stoneleigh, with results showing that most of those quizzed were aiming to boost production next year.
More than six out of 10 said they planned to increase production by an average of 13%, while just 5% said they were looking to reduce production by an average of 10%.
Changes in milk production systems were also on the cards for 65% of those surveyed, with 40% aiming to increase yield per cow and 19% planning to increase the amount of milk produced from grass.
Investing in their businesses was also high on the agenda for half of the study. Around a quarter were looking to improve cow housing and 18% were considering work on their slurry handling and storage. The average planned investment, excluding land, was £98,000.
Issues surrounding Nitrate Vulnerable Zones (NVZ) legislation were on many respondents’ minds. More than half farm land within an NVZ and were looking at an average investment of £57,000 on extra slurry facilities to comply with the updated regulations.
Euryn Jones, national agricultural specialist at Barclays, said: “Although prospects for global dairy commodities are now looking more favourable, future levels of milk prices remain uncertain.
“It is very encouraging therefore that the survey results indicate a fair degree of confidence amongst dairy farmers who visited the Dairy Event. It was particularly encouraging that half of those we spoke to were planning to undertake major investments in their business during the next 12 months.
“Some of the investment directed at developing new slurry management facilities were inevitably driven by NVZ obligations, but several farmers were also investing to expand their businesses by expanding herd size.”
He said that the results should not be considered as the definitive picture across the dairy industry and should be treated with a degree of caution.
“Dairy farmers who are planning to invest in their farms are more likely to attend a Dairy Event, and that the high proportion indicating an intention to invest in their businesses was unlikely to be representative of the dairy farming sector as a whole,” said Mr Jones.
“Despite the uncertainty in the milk market, it is clear that for future milk supply to be sufficient to meet consumer demand, dairy farmers will need to invest in their businesses.”
