FG survey: Dairy farmers remain upbeat about the future
Insights12 Sep 2014 Alistair Driver
Dairy farmers are feeling more confident about their future than they were two years ago, despite the recent wave of price cuts, according to a Farmers Guardian survey.
The survey demonstrates a continued willingness to invest in businesses, with nearly two-thirds of respondents planning to expand in the five years, although 10 per cent of respondents said they intended to quit the industry within five years.
The survey, which was accessible on the FG website for a number of weeks, does not take into account reaction to the most recent price reductions, including First Milk’s 3ppl cut last week.
But it does suggest many within the industry are looking beyond the immediate price woes towards a brighter long-term future.
Key findings include:
Optimism, profitability and expansion
- Nearly 42 per cent of the 262 dairy farmers who responded felt more optimistic than they did in 2012 when harsh price cuts on the back of soaring costs prompted the SOS Dairy industry campaign.
- In contrast, just one in five felt less optimistic.
- Nearly half, 46 per cent, expect their businesses to be more profitable over the next five years than they have been for the previous five years.
- This compared with a fifth who expect their businesses to be less profitable.
- One in 10 intend to quit dairying within the next five years.
- But nearly two-thirds, 64 per cent, intend to expand during this time period, including 18 per cent who plan ‘significant expansion’.
- Less than 4 per cent expect to contract their businesses.
The supply chain and the Dairy Code of Practice
There are some indications efforts to improve supply chain relations following the SOS dairy campaign have had an effect, but the majority still believe the situation is no better or worse. Views on the voluntary dairy Code of Practice are even more stark.
- Only one-third of farmers believe the supply is operating more effectively and transparently than in 2012.
- Nearly one in five feel things have got worse, while 45 per cent see no change.
- Nearly two in three believe the dairy Code it has made no difference, while only 18 per cent think it has had a ‘positive’ effect.
Global markets and TB
We also asked farmers to identify causes for optimism and concern.
- Nearly one in three specified the global market as their greatest cause for optimism.
- But the biggest source of hope among dairy farmers was improvements they have made on farm (48 per cent).
- The biggest cause for concern was, unsurprisingly, bovine TB, identified by 31 per cent of respondents.
- This was followed by the way the UK supply chain is operating (25 per cent), the global market (18 per cent) and the end of milk quotas (17 per cent)