April 4, 2007


UK milk production to drop by 900 million litres in 2009


Milk production in Great Britain could fall by 900 million litres or seven percent over the next two years as the number of producers intend to abandon the industry has increased to its highest for three years, according to a new report by the Milk Development Council (MDC).


In its fourth annual Farmer Intentions Survey, published on Tuesday (3 April), the MDC said a only fifth of producers plan to increase production - down from a quarter in last year's survey - while 16 percent of producers - about 3000 - intend to quit the sector.  This could lead to a 7 percent fall in national milk production by the end of the 2008/2009 quota year, it says.


The MDC says uncertainty and lack of confidence were the main themes from the survey responses.  As a result of falling profits caused by low milk prices and rising input costs many farmers are looking to invest in other enterprises, it adds.


Helen Eustace, MDC senior economist, said many farmers have realized that major changes will be necessary for dairy businesses to remain sustainable in the long term but some find it hard to finance such plans with margins being continually squeezed.


She said even efficient farmers, who normally replace lost production are also considering leaving the industry.