Rain fails to ease problems for dairy farmers

Lack of rain has seen forage levels fall short, leading to fears that farmers may begin to tap into winter stocks early on.

Experts at the National Farmers' Union (NFU) issued a warning that costs of production for the troubled sector could be set to rise again and called upon milk buyers to reflect this in the price they pay farmers for their milk.

NFU dairy board chairman Mansel Raymond said: "Forage stocks are starting to run seriously low with some farmers reporting a drop in first cut silage yields of 20-30 per cent and up to 50 per cent lower yields for their second cut. This all comes on the back of the big freeze, and the late, wet spring, which led to a prolonged winter housing period, depleting feed stocks.

"On top of which straw is also in very short supply meaning bedding costs are hugely expensive. This picture is building into a massive hike in production costs for dairy farmers and tight milk supply forecasts for the rest of the year."

During May milk production in Britain grew by 2.5 per cent compared with last year. However this follows the 2009/10 milk year, which has been classified as the lowest production year on record.

"This small increase on such a low base is nothing to get excited about," said Mr Raymond.

"With weather conditions predicted to remain broadly hotter and drier than average this year, milk buyers and retailers should be genuinely concerned about the impact on milk production in the months ahead.

"The small milk price increases paid to farmers since the NFU published its Great Milk Robbery Report last month will be cushioning producers from some of the higher costs they are facing.

"However, our report suggested that up to 4.3ppl in additional revenue is being made by milk processors on the back of strong commodity markets, so with increases of as little as 0.5 up to 1.5ppl announced since June, there should clearly be more to come.

"I would caution buyers against a 'tit for tat' game of offering small increases for as long as they can get away with it because it could end up being too little, too late."