One in ten dairy farmers believe they will have left the sector by 2025 according to an NFU England survey of 600 businesses. If this was to happen across GB then the sector would contract by 750 businesses which is double the 4.8% fall in the last 12 months,

Concerns over insufficient returns, volatile markets and the scale of on-farm investment were cited in the NFU survey as reasons for the lack in confidence.

Nearly a quarter of respondents said the were "unsure" if their business would continue producing milk beyond 2025.

Farmers in Scotland are similarly concerned about the future of milk following months of plummeting farmgate prices and robustly high input costs.

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Michael Yates at East Logan farm by Castle Douglas who milks 500 dairy cows, told the Scottish Farmer: “I can sympathise with the English dairy farmers. We are still grappling with feed, fuel and energy prices, they are the three big ones. At the other end the milk price is seriously struggling right now and needs to improve quickly, so I understand why many dairy farmers are concerned about an exodus from the sector.

“The processors would have been better off capping the price at 41ppl or 42ppl last year and keeping a steady price in the high thirties. Now we are down at just above 30ppl so there is little margin left in the job.

“The worry is, we still seem to be over producing in the country, with reports from processors saying there is plenty of milk about. It is hard to believe as there was the drought in early summer and the lack of confidence should impact the number of cattle on farms.”

Mr Yates’ concerns were echoed in the survey with 87% of responding dairy farmers saying they are concerned about the impact of government regulation, with feed prices (84%), energy prices (83%) and cash flow and profitability (80%) other key factors that would curtail milk supplies.

Meanwhile, 91% of dairy farmers said the main factor to them increasing milk production would be the scale of investment needed for things such as suitable slurry storage to ensure their farms are compliant - this supports the NFU call for Defra’s Surry Infrastructure Grant to be extended to cover more areas and to lower the minimum spend threshold needed to access the funding.

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NFU dairy board chair Michael Oakes said: “It’s clear that significant inflationary pressures combined with below cost of production prices are continuing to put the resilience of British dairy farming businesses under threat. We are now facing a crisis of confidence among Britain’s dairy farmers.

“The results of this survey show that, now more than ever, we need resilient and collaborative dairy supply chains. It’s vital we reverse this trend of boom or bust and invest in our supply chains. New industry-wide regulation on contracts, expected to be introduced later this year, must support fairer, more transparent and accountable supply chains. But regulation isn’t a silver bullet.

“With increasing global demand for British dairy, we know that the long-term future is bright for our sector. To ensure we maximise this potential, it’s imperative that government continues to work with us to ensure we have the right environmental, regulatory and trade framework in place to support the production of high quality, nutritious and sustainable food.”