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UK Dairy Industry Faces £3.9 Billion Climate Resilience Bill

Source: The DairyNews
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UK dairy farmers are facing a steep financial challenge, with an estimated £3.9 billion ($5 billion) needed over the next decade to make their operations climate-resilient, according to a recent report from Kite Consulting. The study, which analyzed 850 dairy farms across the UK, highlighted the significant investments required to adapt to changing environmental conditions and comply with emerging regulations.
UK Dairy Industry Faces £3.9 Billion Climate Resilience Bill
The report estimates that an average of £472,539 per farm will be necessary to develop the infrastructure and acquire additional land to enhance climate resilience over the next ten years. This equates to an annual cost of about £47,254 per farm. Additionally, farmers are likely to incur an extra cost of 2.4 pence per litre per year to meet environmental standards, adding to their already substantial production expenses.

One of the key areas of investment identified is the expansion of silage storage capabilities. The report suggests that UK dairy farms will need an additional 1,350 tonnes of silage storage each to cope with potential extreme weather conditions, such as droughts or delayed grazing periods. This would provide enough feed to cover an extended period of 1.5 years.

Furthermore, the report addresses the issue of slurry storage, noting that 85% of the nation’s dairies currently have less than eight months of storage capacity. Meeting the proposed guidelines of the Clean Air Strategy 2019, which recommends covering all slurry and digestate stores by 2027, would require significant capital investment. The estimated cost to enhance slurry storage to eight months with covers is around £92,296 per farm.

Kite Consulting warns that without these critical investments, the UK dairy industry could be ill-prepared for future extreme weather events, potentially jeopardizing the livelihoods of farmers and the overall milk supply. The firm stresses the importance of industry-wide financial commitments to safeguard the future of dairy farming in the UK.

The urgency for investment is underscored by recent financial struggles within the industry. For instance, Mona Island Dairy, a cheesemaker based in Anglesey, recently entered administration after failing to secure sufficient short-term funding to continue operations, despite a significant £20 million investment in 2021. This case highlights the broader challenges faced by the UK dairy sector in securing necessary capital to adapt to increasingly stringent environmental and market conditions.
July 2024
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