Dairy farmers face difficult future

The Royal Association of British Dairy Farmers (RABDF) has warned that dairy farmers are facing a difficult future due to continuing financial pressures. According to the RABDF, poor farmgate milk prices and high input costs would mean a tough winter for dairy farmers. 

The cost of milk production is estimated at between 40p and 45p per litre, far surpassing Defra’s average UK farmgate milk price for July 2023, which was 36.11p per litre. According to the RABDF, the difference between the farmgate milk price and retail price is a ‘very live issue’ for farmers who were ‘caught in the crossfire’ as input costs remained high, while consumer demand is being impacted by high retail prices.  

The RABDF also recognised that UK processors faced ongoing high energy and labour costs, and that the situation showed little signs of improvement in the short term. Global market predictions for the next six months have provided little relief for the UK dairy industry. For example, Chinese demand for whole milk powder has fallen, while forward forecasting by New Zealand-based dairy co-operative Fonterra does not provide much optimism.  

The RABDF believes the UK needs a dairy industry that operates efficiently from the farmgate to the supermarket and is profitable for those at every stage of the supply chain in order to be sustainable.  

The RABDF warning follows a survey by the NFU which found that input prices such as feed, energy and fertiliser were all areas of concern for dairy farmers, with almost 90% of dairy producers saying that supply chain fairness was essential to support future milk production. 

Read more about the difficulties facing farmers at: https://bit.ly/45esGtM and https://bit.ly/45ggmsM