Our annual survey of dairy farmers at the Royal Ulster Winter Fair suggests there is no significant lift in local production coming in 2024, with most farmers indicating they intend to hold at current levels.
As shown in Figure 1, a total of 62% of respondents said they will remain at the same output, with just 31% having plans in place to produce more milk.
That is slightly up on the 27% from the 2022 survey, but in over 15 years of asking this question at the event, the 2022 and 2023 responses around future expansion are the lowest we have received.
Set against the 31% who intend to increase output are 7% of farmers who indicated they will either reduce output or exit the sector.
Consistent
In the five years prior to 2021, the number of farmers thinking about expansion averaged well over 50% and in that period NI milk output consistently grew year-on-year, peaking at 2.54bn litres in 2021, up 15% on the 2016 total.
However, despite production being up 1.7% in the first four months of 2022, rising costs put a brake on output and it ended up marginally down on the previous year.
That trend has generally continued in 2023 and to the end of October 2023, NI production stands at 2.13bn litres, down slightly on the equivalent period in 2022.
Our survey analysis suggests something similar will happen in 2024, although much will depend on meal price and how it compares to farmgate returns for milk.
Milk price
When asked what milk price they expect to receive in 2024, the responses were probably influenced by the rises announced just prior to the Winter Fair. As shown in Figure 2, only 3% of respondents expect prices below 30p/l, while 9% think price could end up over 40p/l. However, the vast majority are evenly split between 30-35p/l and 36-40p/l.
In recent years, farmers have tended to underestimate prices for the year ahead, although that did not happen in 2022 when few foresaw the extent to which the market would crash in 2023.
At the 2022 event, over 60% of farmers were expecting prices of at least 42p/l. The average across the first 10 months of 2023 is under 35p/l. The reality is that prices under 35p/l have left many milk producers in a loss-making position, especially given the high costs incurred earlier in the year.
When asked in 2022 what milk price they need to make their businesses financially sustainable, the average across all respondents came to 43p/l.
With some key input costs, such as diesel and fertiliser down since then, that figure has reduced to an average of 36.8p/l at the 2023 event, although it is still well ahead of the 32.3p/l from the 2021 Winter Fair.
The range across respondents in 2023 was from 27p/l to 50p/l. Most farmers in our survey either operate medium (54%) or high (31%) input systems.
Cashflow
With farmers in a tight cash position for much of 2023, we asked what actions have been taken on-farm to improve the situation.
Only 19% of respondents said no action was necessary. Over one-third said they had paused farm development work, with one-quarter selling or culling extra cows. The remainder had fed less concentrate (13%) or extended a loan or overdraft facility with their bank (5%).
Two-thirds have enough fodder
Amid reports of silage pits being rapidly emptied this winter, our survey asked farmers about their current fodder situation.
The majority (65%) said they definitely have enough in-store, although 30% did indicate they are slightly concerned about whether they will get to next spring. That leaves 5% of respondents who don’t have sufficient supplies currently in place.
Most farmers will sign up to sustainability schemes
A number of processors either now offer, or intend introducing, a 0.5p/l payment for suppliers who undertake various actions related to environmental sustainability.
Included within the mix of actions by the likes of Lakeland Dairies and Dale Farm is a requirement to participate in carbon benchmarking once a scheme is rolled out in 2024.
As part of our Winter Fair survey, farmers were asked about their attitude to new sustainability payments. As shown in Figure 3, only 11% said they will refuse to take part.
However, at the other end, only 15% have no concerns around participating. The vast majority (74%) indicated they have (or will) sign up, but with some reservations.
Actions
When asked about what other actions they would be willing to undertake on their farms to improve environmental sustainability, the most popular answer was to grow wider and taller hedges (30%).
Just under one quarter (24%) would be open to planting an area in trees, while 13% would consider growing some multi-species swards and 10% said they would consider digging out a small pond for wildlife.
Only 2% would consider agroforestry in grazing fields. Meanwhile, 23% said they did not want to take any of the actions outlined above.
Knowledge gap around future farm payments
In light of a major shake-up of farm payments, starting in 2024, we asked farmers how they would describe their knowledge of the changes that lie ahead (see Figure 4).
Just 20% said they were well-informed, while 62% indicated they have some awareness.
That left 18% of respondents who admitted they had little knowledge around future agricultural policy in NI.
A big thank you to all the farmers who visited our stand and to those who took time to fill out our survey. The winner of our prize draw was Niall Conway, Strangford, Co Down.
Read more
Hallow Holsteins hail at 37th RUAS Winter Fair
NI milk prices head in right direction
Our annual survey of dairy farmers at the Royal Ulster Winter Fair suggests there is no significant lift in local production coming in 2024, with most farmers indicating they intend to hold at current levels.
As shown in Figure 1, a total of 62% of respondents said they will remain at the same output, with just 31% having plans in place to produce more milk.
That is slightly up on the 27% from the 2022 survey, but in over 15 years of asking this question at the event, the 2022 and 2023 responses around future expansion are the lowest we have received.
Set against the 31% who intend to increase output are 7% of farmers who indicated they will either reduce output or exit the sector.
Consistent
In the five years prior to 2021, the number of farmers thinking about expansion averaged well over 50% and in that period NI milk output consistently grew year-on-year, peaking at 2.54bn litres in 2021, up 15% on the 2016 total.
However, despite production being up 1.7% in the first four months of 2022, rising costs put a brake on output and it ended up marginally down on the previous year.
That trend has generally continued in 2023 and to the end of October 2023, NI production stands at 2.13bn litres, down slightly on the equivalent period in 2022.
Our survey analysis suggests something similar will happen in 2024, although much will depend on meal price and how it compares to farmgate returns for milk.
Milk price
When asked what milk price they expect to receive in 2024, the responses were probably influenced by the rises announced just prior to the Winter Fair. As shown in Figure 2, only 3% of respondents expect prices below 30p/l, while 9% think price could end up over 40p/l. However, the vast majority are evenly split between 30-35p/l and 36-40p/l.
In recent years, farmers have tended to underestimate prices for the year ahead, although that did not happen in 2022 when few foresaw the extent to which the market would crash in 2023.
At the 2022 event, over 60% of farmers were expecting prices of at least 42p/l. The average across the first 10 months of 2023 is under 35p/l. The reality is that prices under 35p/l have left many milk producers in a loss-making position, especially given the high costs incurred earlier in the year.
When asked in 2022 what milk price they need to make their businesses financially sustainable, the average across all respondents came to 43p/l.
With some key input costs, such as diesel and fertiliser down since then, that figure has reduced to an average of 36.8p/l at the 2023 event, although it is still well ahead of the 32.3p/l from the 2021 Winter Fair.
The range across respondents in 2023 was from 27p/l to 50p/l. Most farmers in our survey either operate medium (54%) or high (31%) input systems.
Cashflow
With farmers in a tight cash position for much of 2023, we asked what actions have been taken on-farm to improve the situation.
Only 19% of respondents said no action was necessary. Over one-third said they had paused farm development work, with one-quarter selling or culling extra cows. The remainder had fed less concentrate (13%) or extended a loan or overdraft facility with their bank (5%).
Two-thirds have enough fodder
Amid reports of silage pits being rapidly emptied this winter, our survey asked farmers about their current fodder situation.
The majority (65%) said they definitely have enough in-store, although 30% did indicate they are slightly concerned about whether they will get to next spring. That leaves 5% of respondents who don’t have sufficient supplies currently in place.
Most farmers will sign up to sustainability schemes
A number of processors either now offer, or intend introducing, a 0.5p/l payment for suppliers who undertake various actions related to environmental sustainability.
Included within the mix of actions by the likes of Lakeland Dairies and Dale Farm is a requirement to participate in carbon benchmarking once a scheme is rolled out in 2024.
As part of our Winter Fair survey, farmers were asked about their attitude to new sustainability payments. As shown in Figure 3, only 11% said they will refuse to take part.
However, at the other end, only 15% have no concerns around participating. The vast majority (74%) indicated they have (or will) sign up, but with some reservations.
Actions
When asked about what other actions they would be willing to undertake on their farms to improve environmental sustainability, the most popular answer was to grow wider and taller hedges (30%).
Just under one quarter (24%) would be open to planting an area in trees, while 13% would consider growing some multi-species swards and 10% said they would consider digging out a small pond for wildlife.
Only 2% would consider agroforestry in grazing fields. Meanwhile, 23% said they did not want to take any of the actions outlined above.
Knowledge gap around future farm payments
In light of a major shake-up of farm payments, starting in 2024, we asked farmers how they would describe their knowledge of the changes that lie ahead (see Figure 4).
Just 20% said they were well-informed, while 62% indicated they have some awareness.
That left 18% of respondents who admitted they had little knowledge around future agricultural policy in NI.
A big thank you to all the farmers who visited our stand and to those who took time to fill out our survey. The winner of our prize draw was Niall Conway, Strangford, Co Down.
Read more
Hallow Holsteins hail at 37th RUAS Winter Fair
NI milk prices head in right direction
This is a subscriber-only article
SHARING OPTIONS: