October 13, 2006

Most UK dairy farmers plan to expand production

UK's dairy farmers are planning to expand milk production, according to a survey conducted at last week's Dairy Event by Barclays Agricultural Banking.

The survey shows that 60 percent of farmers interviewed intend to expand milk production during the next 12 months, by an average of 15 percent.

The farmers who participated in the survey currently produce an average of 1.5 million litres of milk. Barclays spoke to around 70 farmers with milk production ranging from 350,000 litres to 6 million litres.

Of the dairy producers intending to increase production, most belong to the category already producing over a million litres, said Euryn Jones, Barclays Agricultural Policy Director. Most producing less than 1 million litres said they would not be expanding this year, he added.

The survey also asked farmers about the Single Payment, which was paid out by the government for the first time earlier this year.

The Single Payment was paid in lieu of reduced government support prices for items such as dairy and cheese. Dairy farmers are entitled to a premium when market prices fall below an intervention price.

Close to half said they used the payment for day-to-day running expenses on the farm while one-third said it had been used to reduce bank borrowing.