350 GB Farmers Exit Amidst Milk Price Plunge and Rising Costs
Source: The DairyNews
Poor returns at the farmgate have driven a significant exodus, with 350 dairy farmers in Great Britain exiting the industry in the past year.
As of October 2023, only 7,500 dairy farmers remained in England, Scotland, and Wales, marking a 4.5% decline from the previous year, according to a survey conducted by AHDB among major milk buyers. The study also revealed that 70 producers ceased operations since the last survey in April 2023.
The continuous drop in milk prices, coupled with escalating input costs, has created a challenging environment for farmers striving to turn a profit. In September 2023, the Defra UK average milk price plummeted to 36.36 UK pence per litre, a nearly 13 pence drop compared to the same month in 2022. Despite some relief in inflationary pressures on key farm inputs, costs such as energy, fuel, feed, and fertilizers remain historically high, contributing to tightened farm margins.
While the average milk production per farm has increased year-on-year, maintaining stability compared to April 2023 volumes, there is a notable shift towards larger farms in response to the challenging economic landscape.
Farms, having initially pushed for increased yields in the latter part of 2022 amidst high milk prices, are now prioritizing efficiency improvements and cost reductions in 2023. Favorable grass growth during the 2023 season sustained milk yields from grazing cows, despite the overall decline in production.
Recent months have witnessed a decrease in GB milk production, with September and October volumes down year-on-year by 1.3% and 2.7%, respectively—a trend that AHDB predicts will continue into the new season.
In contrast, Northern Ireland reported an increase in dairy farm numbers, with the December 2023 Daera census indicating 2,613 dairy farms and 319,346 dairy cows. This compares to 2,608 farms and 316,775 cows in 2022.
The continuous drop in milk prices, coupled with escalating input costs, has created a challenging environment for farmers striving to turn a profit. In September 2023, the Defra UK average milk price plummeted to 36.36 UK pence per litre, a nearly 13 pence drop compared to the same month in 2022. Despite some relief in inflationary pressures on key farm inputs, costs such as energy, fuel, feed, and fertilizers remain historically high, contributing to tightened farm margins.
While the average milk production per farm has increased year-on-year, maintaining stability compared to April 2023 volumes, there is a notable shift towards larger farms in response to the challenging economic landscape.
Farms, having initially pushed for increased yields in the latter part of 2022 amidst high milk prices, are now prioritizing efficiency improvements and cost reductions in 2023. Favorable grass growth during the 2023 season sustained milk yields from grazing cows, despite the overall decline in production.
Recent months have witnessed a decrease in GB milk production, with September and October volumes down year-on-year by 1.3% and 2.7%, respectively—a trend that AHDB predicts will continue into the new season.
In contrast, Northern Ireland reported an increase in dairy farm numbers, with the December 2023 Daera census indicating 2,613 dairy farms and 319,346 dairy cows. This compares to 2,608 farms and 316,775 cows in 2022.
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