The results from the survey, revealed that 9% of producers believe they are likely to stop producing milk by 2025 and a further 23% said they were ‘unsure’ if they would be continuing to milk cows beyond 2025.
Insufficient returns
The most common reason given by those who thought they would cease milk production within the next two years were insufficient returns from the market and the scale of investment required to comply with government regulation.
The survey also revealed that when asked about the next two years:
- The impact of government regulation was a major concern for 87% of respondents.
- Input cost inflation remains an area of worry, with increases in feed (84%), energy (83%), and fertiliser (74%) highlighted as concerns.
- Over one third (36%) of those ceasing production are doing so due to retirement, with almost a fifth (18%) handing over their farm to the next generation.
When asked about plans to increase milk production, the majority (91%) said the scale of investment needed to remain compliant, such as slurry storage, was the main factor influencing their decision.
Challenging market situation
The findings of the survey are reflective of the challenging market situation that many dairy farmers face with input costs, whilst down from their peak, still stubbornly high and milk price for many falling under the cost of production. There also remains uncertainty about a possible licencing scheme under NVZ regulations and the planning system continued to pose a barrier for those seeking to invest in additional slurry storage.
With a growing global population, and increasing demand for dairy products, the longer-term outlook is bright for the sector, however, these results underline the immediate challenges which exist on many farms. New legislation regulating dairy contracts is expected later this year and whilst the market will always set the price, there is an opportunity to secure fairer, more transparent and accountable supply chains. NFU Cymru will be feeding the results of this survey into those discussions with the supply chain and wider industry to ensure the risks and rewards are shared and dairy farm resilience is not taken for granted.
The results also provide further evidence to support our lobbying work in Cardiff and Westminster, as we continue to encourage politicians to create the right environmental, regulatory and trade framework to support the continued production of quality, nutritious and climate friendly milk in Wales.