Tougher competition for milk products in the home market

We might have missed the worst of the flooding as seen in other parts of Britain, but it’s still wet out there and getting wetter every day.

Wednesday, 29th January 2014, 9:35 am

Wellingtons are still well up the list of useful inventions as farmers and staff plodge through the daily round of livestock care and feeding or as those with “only” crops to worry about try to pick their way round the dry parts of fields.

Ankle deep in mud or shin deep in water it’s difficult to decide whether a mild, wet winter is preferable to one of frost and snow. I suppose the proviso is that when the snow and ice finally melts we’re back where we are now in mud and water.

In 1903 there were 5735 dairy farms in Scotland, average herd size 39 cows.

There are now 993 dairy farms, down 18 on last year, average 165 cows. That fewer farms/bigger herds trend will continue as milk quotas are about to be scrapped, in 2015, after 30 years.

Volatile markets and soaring production are forecast which will mean even tougher competition in the home market and a search for new markets overseas for milk products.

These most recent figures also confirm how dairy farming is concentrated in the milder West of Scotland with 236 herds in Ayrshire and 160 in Dumfriesshire. There are now only two left in Berwickshire after the recent sale of Jimmy Hodge’s Lemington herd, average herd size 424; two in East Lothian, average 307; two in Peeblesshire, average 336; and nine in Roxburghshire, average 244.

It’s a specialist business.

As so often with farming, conflicting stories can confuse the reader. Last week there was a “Beef in crisis” headline at the same time as “Cattle prices up almost 7% on the year.” Can both be correct? Indeed they are.

Marketprices for cattle are higher than last year because there are fewer beef cattle for sale. And unless something is done about implementation plans for the European Union’s common agricultural policy (CAP) beef farmers warn that decline in number will become catastrophic.

The nub of the problem is that the proposed way of paying subsidies from 2015 will cut payments for most beef and sheep farmers.

Monitoring of farm accounts suggests that with present support payments only a small percentage of specialist beef farmers make a profit.

A cut in payment will, they say, make beef production impossible.

The Scottish government accepts that there are problems, but says it has no leeway to alter CAP decisions. It is banking on home and overseas demand for Scotch beef to keep farmers in business. Good luck with that.

The knock-on effect of the disastrous weather of 2012 and lost income especially from crops was that last year farm machinery sales in Britain dropped 4%. Tractor numbers sold fell by more than 10% but – another sign of the times – the average size increased to more than 150hp.