UK Dairy Farmers Urged to Prioritize Profitability Over Output
Source: The DairyNews
In the face of soaring input costs and sluggish demand from China, dairy farmers are being advised to redirect their focus towards profitability rather than output. According to Michael Haverty, a partner at Andersons Centre, the dairy sector experienced a significant correction in 2023 after overshooting world markets in 2022, resulting in a misalignment with EU and global values.
Haverty highlights the challenges posed by the liquid milk market, which has encouraged high-cost production systems, leading to inflated production costs.
Haverty emphasizes that the most profitable dairy operations are those employing low-cost, medium-output, grazing-based systems with a focus on cost control. He notes positive prospects for certain farming models, such as the Scottish version of Friesian farms, but underscores the dependence on milk price recovery.
Over the past two decades, profit margins from production have remained stagnant, averaging just 1p per litre. Haverty underscores the sector's need to address labor shortages and capital investment requirements. He suggests avenues for cost reduction, including improved forage production and better utilization of fertilizers and manures.
In conclusion, Haverty urges dairy farmers to embrace innovative approaches to lower production costs amidst ongoing market volatility.
Haverty emphasizes that the most profitable dairy operations are those employing low-cost, medium-output, grazing-based systems with a focus on cost control. He notes positive prospects for certain farming models, such as the Scottish version of Friesian farms, but underscores the dependence on milk price recovery.
Over the past two decades, profit margins from production have remained stagnant, averaging just 1p per litre. Haverty underscores the sector's need to address labor shortages and capital investment requirements. He suggests avenues for cost reduction, including improved forage production and better utilization of fertilizers and manures.
In conclusion, Haverty urges dairy farmers to embrace innovative approaches to lower production costs amidst ongoing market volatility.
