Farming unions warn of rising dairy production costs

Even those on the best performing contracts will be struggling with rising costs, the unions warn
Even those on the best performing contracts will be struggling with rising costs, the unions warn

The UK's farming unions have warned of the increasing dairy production costs the sector faces alongside unsustainable milk prices.

The unions have said that the dairy industry is facing an 'extremely challenging year' on the back of spiralling production costs and variable milk prices.

It follows new analysis from AHDB which highlights how the milk to feed price ratio for some producers is at a level which historically has led to reducing milk production.

Farming unions and other industry groups have previously highlighted the 'haves and have nots' when it comes to dairy contracts.

Even those on the best performing contracts would be struggling to keep up with the rising bills, they have warned.

NFU dairy board chair Michael Oakes said: “For those on the least favourable contracts, we know it means that many may consider cutting production or leaving the industry.

"Milk prices may now be improving slightly, but those on certain contracts will have been suffering losses for a while now, which is unsustainable.”

NFU Scotland milk committee chair, Gary Mitchell said there was a number of farmers who were receiving below the UK average farmgate milk price for April 2021.

"The AHDB data is clear; milk supply is likely to suffer if this trend of cost to income is not rectified," he explained.

“For too long dairy farmers in the UK have been asked to produce a quality product at an unsustainable price - one which inhibits on farm investment and a profitable return for the primary producer.

"The whole supply chain from cow to consumer must recognise the severity of this situation.”

NFU Cymru milk board chair Abi Reader added: “Compliance with a huge array of standards is constantly in milk producers’ minds, to meet consumer demands and trust in the UK’s amazing safe and trusted dairy products.

"Although those standards are very important to our industry, it comes at a cost and those producers with milk prices below average will be hardest hit."

In Northern Ireland, farmers are facing the challenge of constantly rising variable input costs which is 'seemingly relentless', the Ulster Farmers' Union (UFU) warned.

Dairy chairman Mervyn Gordon said: “This expands beyond traditional dairy inputs to include many general and capital items needed to run a viable dairy enterprise.”