British dairy farmers lose 9,4 million pounds

British dairy farmers will suffer a financial blow of £9,4 million in April, according to research by the Agriculture and Horticulture Development Board (ADHB). Dairy farmers are experiencing several adverse consequences of the corona crisis.

The figures are part of a new report from the ADHB. It examines the financial impact of the coronavirus on the dairy sector. Of the estimated 9.200 dairy farmers in Great Britain, more than 5.200 dairy farmers feel a drop in milk prices.

The report also shows that the milk collection has been canceled at nearly 500 dairy farmers, with a million liters of milk reportedly being washed away in recent weeks. Another 500 dairy farmers have to deal with deferred payments. About 2.200 dairy farmers have requests to reduce milk production and 700 dairy farmers receive a lower price for the same volume. According to Chris Gooderham and Patty Clayton, authors of the report, a number of farmers are experiencing several of these adverse effects.

Financial consequences
According to the ADHB, the coronavirus has so far had some form of impact on about three quarters of dairy farmers. The impact is very large on about 12% of companies, another 14% suffers from an average impact of the crisis.

With all the announcements made so far, the damage from April's milk price cuts is estimated at more than £7 million. This impact will increase to almost £13 million over the month of May, when other cuts also come into effect. Overall, the financial blow to dairy farmers for April 2020 is calculated at £9,4 million, the authors say.

Savings on feed costs
Due to the declining yields, dairy farmers have to be more economical. The costs can be reduced by, for example, administering less concentrate. In that case, the knife cuts both ways: the report assumes that 2% less concentrate leads to a comparable percentage amount of milk reduction. An entrepreneur can also reduce feed costs by feeding the milk to the young stock. The report shows that the costs of reducing milk production will vary widely from farm to farm.  

Chanti Oussoren

Editor at Boerenbusiness who studies the dairy, pig (meat) and feed markets.

c.oussoren@boerenbusiness. Nl

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