May 7, 2008

Price cuts will make UK dairy farmers leave the industry

A survey of dairy farmers in the UK showed that even as producers are prepared to increase output, they are also concerned about any possible drop in milk prices.

The survey was conducted by levy board sector company Dairy Co.

About 40 percent of dairy farmers surveyed said they planned to expand their milk production, compared with 20 percent in 2007, while the number of farmers preparing to leave the industry fell to 7 percent.

Dairy farmers are also expecting prices to rise by over 2p per litre in the next two years, the survey suggested.

A reduction of 4p per litre in the price of milk, however, could cause more than two-thirds of producers to leave the industry, according to the survey.

US$1=GBP0.51, as of May 7, 2008