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Dairy Farmer magazine's January 2016 digital edition

Insights

Don’t miss this month’s new look Dairy Farmer. Take a look at the digital edition today.

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A word from the Editor

It is customary to kick off any new year with an optimistic stab at the encouraging things which go to make the hard graft of milk production worthwhile.

 

But just at the moment finding that spirit-lifting element is nigh on impossible, as virtually everywhere you look the omens are far from reassuring.

 

Production is riding high, stocks building and the current weak demand is conspiring to decimate returns, and paradoxically the financial brake which would normally curtail output and turn around that depressed market, doesn’t seem to be working.

 

Call us castaglooms if you want, but regrettably it is not just us as you only have to put your eye over Andersons’ latest report to see what they think.

 

In their Outlook document for 2016, it said: “There is little doubt that only the most efficient farmers can achieve a long and sustainable future at current prices.”

 

Which is fair enough, but they don’t leave it there. It goes on: “The 9700 producers in England and Wales might well reduce by between 30% and 50% within the next three to five years, if prices remain low.”

 

Which is enough to put the frighteners on anyone and they advise producers to determine the price at which they can survive, and suggest a figure of 26-28ppl as being a sustainable target.

 

Which is a darned sight more than most are getting and well below the considered 30p cost of production.

 

Not the sort of news anyone wants to hear as they face the challenge of the coming year but, as politicians know only too well, unpredicted things do happen, and let’s hope we see a quick turnaround in affairs!

 

Peter Hollinshead, Dairy Farmer editor

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