Dairy industry going strong in South West contributing £3.3bn to economy, new report finds

Producer numbers have fallen by over half in the last 14 years
Producer numbers have fallen by over half in the last 14 years

The dairy industry in the UK may be declining across the country but still going strong in the South West, contributing £3.3bn to the local economy, a new report finds.

The report, published by the Rural Business School at Duchy College, said every year the region produces more than three billion litres of milk.

The pressures faced by the dairy industry were also highlighted.

The number of dairy cattle has also steadily declined in recent years
The number of dairy cattle has also steadily declined in recent years

Producer numbers have fallen by over half in the last 14 years, from 5,157 in 2002 to 2,885 in 2016.

The number of dairy cattle has also steadily declined in recent years.

Researchers say this is further evidence that although the industry is in decline, the South West is one of the more robust dairy areas.

Importance to the region

Milk buyers are lagging behind in passing on the huge lifts in market prices to their suppliers
Milk buyers are lagging behind in passing on the huge lifts in market prices to their suppliers

"We commissioned this piece of work to take a snapshot of the sector and show the enormous value in the supply chain and beyond that dairy farmers deliver for the economy," said Andrew Branton, chairman of the NFU’s South West dairy board.

"It also highlights some of the challenges which currently face the industry.

"The presence of dairy farmers must not be taken for granted and they need to have a profitable future if we want to continue to see them generate millions of pounds for the economy.

"Aside from the economic aspect, we mustn’t forget how much farmers contribute to the environment and tourism, by maintaining the countryside, and how they help sustain local communities."

Melanie Squires, regional director of the South West NFU, said the report illustrates how important dairy farmers are to the region.

"If you take into account the value added to dairy products after they leave the region the industry is worth even more than the figures we have identified," Mr Squires said.

"This underlines how important it is that the Government, Local Economic Partnerships, banks and other funding and infrastructure bodies continue to support the agricultural industry as we move towards Brexit."

'Milk buyers should be concerned'

NFU dairy board chairman Michael Oakes said that milk buyers are lagging behind in passing on the huge lifts in market prices to their suppliers.

“Since May this year market indicators have started to show a massive differential between what prices dairy farmers should have got compared to what they actually did get – between June and September this adds up to around £200 million,” said Mr Oakes.

“Clearly milk buyers should be concerned as to where their future milk supply will come from.

"Farmers have been patient, understanding the time lag that is part of dairy trade.

"However, that reason is starting to wear thin, as we need to start considering increased costs of winter housing and feeding.

"Our message is clear – until milk buyers start backing British dairy farmers and start paying fair, sustainable milk prices, volumes will not recover.

"Dairy farmers want to produce milk and the only way milk buyers can pull the dairy sector out of this nose dive is to quickly pay them a profitable price for their milk," Mr Oakes concluded.