If the raw milk price was to settle at a long-term average of 15p per litre, then about 40% of the UK’s most efficient dairy farmers would be advised to quit, says dairy consultancy firm Kite.
The analysis follows a survey of dairy farmers’ consultants who were asked what they would advise clients to do, or what they thought clients would do, at certain raw milk price levels.
If 40% of the UK’s best dairy farmers were to quit, then milk production would fall by 25-30%, Kite warns.
At 17p per litre, about 17% of producers would be advised to quit. But other producers would be expected to expand at this price, resulting in milk volumes falling by only 5%.
At 19p per litre, however, hardly any producers would quit and a significant majority would expand, bumping up milk volumes by a collective
15%. At this level farmers would be able to invest in their businesses, said the consultants.
The current raw milk price is approximately 18p per litre.