February 8, 2011

UK dairy industry faces US$531.60-million deficit in 2011

Rising production costs may put more UK dairy farmers out of business as the industry faces a GBP330-million (US$531.60-million) shortfall this year, based on research from the National Farmers' Union on Monday (Feb 7).

The study found that dairy farmers lose an average of 3.16 pence for every litre of milk produced every year. With 11 billion litres of milk produced annually across the country, this equates to an overall loss to the sector of more than GBP330 million (US$531.60 million).

Much of this deficit is down to rising feed and bedding costs. Feed prices are forecast to rise by 16.6% in 2010-11, while the report found that bedding is already 13.8% more expensive than a year ago.

NFU dairy board chairman Mansel Raymond said, "These stark figures reveal the very desperate situation on many dairy farms and won't be a surprise to the many farmers out there who are trying to make a living."

The figures will heighten concerns that the UK dairy sector is set to decline even faster this year. According to new figures from the Milk Development Council, the number of dairy producers in England and Wales in December 2010 stood at 11,041, a fall of 461 on the year before.

The research included data covering 809 dairy units and provided actual costs for April 2009 to March 2010 and projected costs for April 2010 to March 2011.