The report suggests that, while there are significant challenges such as input price inflation, the underlying potential remains strong and the UK dairy industry has the potential to increase output to 15.0bn litres per annum by 2020 given the right cost structure and technical improvements.
Commenting on the report, John Allen, managing partner, said: “While we believe consolidation will continue, the changing landscape in which the dairy industry operates will also bring opportunities. There is, in future, likely to be increasing diversity in dairy farming systems, and this is something to be embraced. Farmers will need to choose their market and production system carefully, and excel at what they do if they’re to prosper.
“If farmers can operate at or around world prices, then we believe that dairy farming can be profitable enough to give farmers just rewards for their efforts and support reinvestment.
“To achieve this will require technical improvements by farmers, continued investment by processors, better market focus, responsiveness and equality through the supply chain, improved consumer engagement, sufficient margins to facilitate capital expenditure, a steady flow of well trained staff into the industry and support by policymakers.
“It will not necessarily be easy, but we believe that if everyone in the industry adopts a forward thinking and positive attitude, then there are opportunities ahead.”
Source: Kite Consulting
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