Sustainability Remains Important for the Future of Dairy Farms
Source: dairynews.today
Greg Ricketts, a farm business consultant, highlights the importance of resilience for dairy farms amid predictions of persistent milk price volatility over the next 15 years.
Resilience, the ability to withstand and recover quickly from difficulties, is crucial for dairy farms as milk price volatility is expected to persist for the next 15 years, according to Greg Ricketts, a farm business consultant at GSC Grays.
He argues that businesses need to keep their production costs below the average milk price to stay resilient.
The disparity in profits among dairy farms is vast, with figures from AHDB in 2024 showing profits ranging between £42,800 to £169,300.
"Farm business resilience and lending capacity go hand in hand," explains Ricketts.
"The relationship between profit and cash is critical for a business." He notes the importance of generating a cashflow surplus and maintaining a good debt-to-asset ratio, suggesting that businesses with strong equity will find it easier to access finance for growth.
Adam White, head of agriculture at Barclays, emphasizes the role of financial performance, assets, and forecasts in securing bank loans.
He points out the growing importance of diversification and sustainability in farming strategies, while advising farmers to measure carbon emissions to capitalize on emerging markets like biodiversity net gain.
White highlights the significance of engaging with professionals and peers to explore diversification opportunities while banks also assess farmers' engagement with sustainable farming incentives to offset the reduction in basic payment schemes.
He argues that businesses need to keep their production costs below the average milk price to stay resilient.
The disparity in profits among dairy farms is vast, with figures from AHDB in 2024 showing profits ranging between £42,800 to £169,300.
"Farm business resilience and lending capacity go hand in hand," explains Ricketts.
"The relationship between profit and cash is critical for a business." He notes the importance of generating a cashflow surplus and maintaining a good debt-to-asset ratio, suggesting that businesses with strong equity will find it easier to access finance for growth.
Adam White, head of agriculture at Barclays, emphasizes the role of financial performance, assets, and forecasts in securing bank loans.
He points out the growing importance of diversification and sustainability in farming strategies, while advising farmers to measure carbon emissions to capitalize on emerging markets like biodiversity net gain.
White highlights the significance of engaging with professionals and peers to explore diversification opportunities while banks also assess farmers' engagement with sustainable farming incentives to offset the reduction in basic payment schemes.
