Income figures paint stark picture for English dairy sector

Latest government figures show the average dairy incomes for the year ending February 2024 are just £50,000 compared to £229,000 in 2022/3. The 78% reduction is very similar to the 77% fall for cereal businesses, according to provisional figures from the Department of Environment, Food and Rural Affairs.

The projected dairy returns are not only lower year-on-year but low in comparison to recent years, including the pre-Covid period. Returns for dairy are down 48% on 2016-19 averages and 62% on 2018-23.

The National Farmers’ Union said the figures painted a stark picture of the challenges facing farmers.

Financial resilience for dairy farmers

NFU president, Tom Bradshaw, said farmers needed to know that the government was creating policies that support them to build financial resilience into their businesses: “Profitable farm businesses are essential if we are to deliver what the country needs; food produced to world leading standards and environmental protection. We need government to deliver on its promises and prioritise domestic food production with a clear commitment to a budget that can underpin food production and deliver for the environment,” he said.

Independent modelling from The Andersons Centre, commissioned by the farm union, suggests an annual budget of £4 billion is needed to support the government’s statutory environmental ambitions and a balanced agricultural policy.

“Under current support arrangements the sector will receive £720 milllion of stability funding and maintaining this level of funding is vital to strengthen the resilience of a sector already facing significant economic challenges,” he added.

The figures back claims in November by the Agriculture and Horticulture Development Board (AHDB) which said 350 dairy producers, or nearly 5% of the national herd, had left the sector in the past year. It said the major driver in the fall had been lower farmgate milk prices, which in September 2023 were 13ppl lower at 36.36ppl compared to a year earlier.

Freya Shuttleworth, AHDB’s senior analyst, said this paired with high energy, fuel, feed and fertiliser costs had resulted in a tightening of farm margins.