In a new survey of over 350 dairy farms by Professors David Colman and Yaqin Zhuang of the University of Manchester, over 12% of farms, far more than expected, ceased dairy farming in the two years since the original survey of April 2003.
Another 8.7% intend to quit and a further 8.4% remain uncertain about their future.
The rate of growth of milk output of continuing producers has been insufficient to offset that lost. Not only did more farms cease production than had intended to do so, but there was a higher concentration of more profitable and larger herds among those that quit. Consequently, “there will be a more significant downturn in milk production in England than previously projected”. In Wales, the decline may be less severe.
The main reason for quitting was low profitability, and the authors conclude that “the most pessimistic of our forecasts” about pricing and production will prevail. In volume they predict that UK output will fall to around 13.3 billion litres in 2007/8, as against a national quota of 14.41 billion.
NFU dairy board chairman Gwyn Jones said: “If a sustainable future is to be achieved for the dairy industry a profitable supply base is vital. That will not happen if short-sighted pricing decisions from those further up the dairy chain continue to drive even the largest, most efficient herds from production.”