As the warm spring weather arrives, a quiet confidence is spreading across the dairy industry as UK milk production hits its highest levels in 20 years and farmgate milk prices remain steady.
In February, British dairy farms produced an incredible 1,090m litres of milk, 112m more than in the same month last year, and a DairyCo survey reports confidence amongst dairy farmers is at a three-year high. A second survey from Dairy Farmer Intentions shows that over the next five years, 58% of farmers are optimistic about the industry and 62% are optimistic about their own business over the same period.
This is positive news for an industry that has faced turbulence over recent years and has resulted in increased production. DairyCo believes that farmers’ confidence could lead to a 5% rise in British milk production, equating to about 350m litres a year.
Despite this, farming can be a fickle business due to its high dependency on several factors outside of our direct control, such as the weather. The recent increase in milk production is in part due to the warm, dry summer after a cold, late spring in 2013. The grass grew well and it is always the case that after a dry summer, cows tend to milk well the following winter.
The good grass growth meant that the silage was generally good, which in turn has resulted in cows milking well. Although the gradual rise in milk prices may have given farmers all the right signals, it’s the silage quality that has had far more effect than anything else.
With a fine early spring giving a good start to this year’s growing season, the immediate outlook for British Dairy Farmers continues to look positive. Yet despite this, the UK is a long way off hitting quota levels.
The dairy industry’s recently released ambitious strategy for growth aims to see British producers take a bigger share of the growing global dairy market and to eradicate the so-called “dairy deficit” where the UK imports more than £1.27bn of dairy products than it produces every year. The Leading Way document calls on farmers and the rest of the supply chain to join forces in order to eliminate the 3.4bn litre dairy deficit by 2050 and enable Britain to successfully compete in the global market going forward.
This optimism and ambition coincides with Meadow’s current expansion programme to enable us to handle even more milk from our pool of British farmers. We have begun work at Chester to allow for an additional 5,300sqm of processing and storage facilities to meet our ambition of expanding the site’s producer base by up to 500 million litres.
Work is also well underway at our Peterborough site where an initial £1.3m has been invested to fully automate and double the cultured plant’s capacity. We have also identified a further £1.8m for new mix tanks, inline standardisation and additional on-site storage. This investment will improve product quality and give us the capacity to produce enough packed cream to satisfy the entire UK market.
Let’s hope that the positive vibes currently being emitted from the dairy industry continue for a mutually successful future and that the industry is able to take advantage of the current optimism and opportunity.