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Falling milk prices fuelling wave of small dairy closures

Posted: 1 September 2023

By Patrick McGuigan

Dairy cows farming price of milk cheese
Falling milk prices fuelling wave of small dairy closures

Hundreds of small dairy farms have been forced to close this year because of falling milk prices, leading to concerns that artisan cheesemakers could struggle to find suppliers in the future.

According to the Agriculture & Horticulture Development Board, 350 dairy farms closed between October and April, representing a 4.5% fall compared to a year earlier.

There are now just 7,500 milk producers in the UK, compared to more than 9,300 five years ago. Recent closures are being blamed on a steep fall in milk prices from 50p/litre last year to a current price of around 37p, while farmers continue to battle high energy, feed, fertiliser and labour costs.

While falling milk prices might be good for cheesemakers on paper, it is small dairy farms that have been hit hardest by the volatility and are deciding to sell up – a trend that is particularly worrying for artisan cheesemakers, who rely on good quality milk. “It’s not good news for artisan cheese,” said Jonny Crickmore, owner of Suffolk dairy farm and cheese business Fen Farm Dairy.

“Once farms leave dairy farming they don’t come back, which means less milk for artisan cheesemakers. Last summer’s drought put pressure on feed prices and forage. Milk prices are dropping like a stone, while feed and fertiliser prices have doubled in the past year. The numbers just don’t stack up.”

He added that attractive subsidies for wildlife and environmental schemes were also tempting farms away from dairy, while a lack of labour and rising wages are making life difficult for farmers. While many farms are selling their herds, others are turning to cheese to add value to their milk, indicating there could also be positive outcomes from the crisis.

At Nutfield Dairy near Redhill in Surrey, which has a 25-strong herd of Dairy Shorthorns, co-owner Matt Elphick has recently moved from liquid milk to making a Tomme-style cheese called Surrey Red, in an effort to counter rises in energy costs.

“I used to do relief milking around here and five or six of the farms I worked for have closed recently,” he said. “Cheese is a way to add value, which I think more farmers will be looking at, but the investment costs are considerable and that may put them off.”

This article first appeared in the September 2023 edition of Fine Food Digest.