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UK dairy industry cautioned about the financial implications of building climate resilience

UK dairy industry cautioned about the financial implications of building climate resilience Dairy & Soy Food Food and Beverage Business dairy, UK Dairy, Dairy Farmers

To future-proof their farms against climate change, UK dairy farmers are facing the need to invest approximately £3.9bn ($5bn) over the next decade, according to recent research conducted by UK dairy consultancy firm Kite Consulting. The findings, based on an assessment of 850 dairies nationwide, reveal that each farm will require around £472,539 to develop the necessary infrastructure and additional land to enhance climate resilience over the next ten years. This translates to an annual investment of £47,254 per farm.

In addition to infrastructure upgrades, an extra 2.4 pence per litre annually will likely be necessary to ensure environmental compliance, on top of regular production costs. The average costs per dairy are estimated based on an average herd size of 236, housed for approximately 30 weeks.

According to the report, UK dairy farms will need to increase silage storage by 1,350 tonnes per farm to safeguard against extreme weather events like droughts or delayed pasture turnout. Furthermore, Kite estimates that 85% of the nation’s dairies have less than eight months of slurry storage, necessitating additional capital investment to reach the eight-month threshold.

The Clean Air Strategy 2019 proposes covering all slurry and digestate stores by 2027, potentially requiring dairy farms to invest in covered slurry storage. Although new regulations on covered slurry storage are not anticipated to take effect for another three years, upcoming “increasing regulatory requirements in this area” are on the horizon. Kite’s research indicates that 92% of dairy farms may need to invest in covered slurry storage if new laws are enforced.

Failure to invest in climate risk mitigation puts the industry at risk of being unprepared for extreme weather events, jeopardizing the future of some farms and milk production. The report emphasizes the critical need for industry investment to ensure a secure milk supply.

While securing investment has been challenging in recent years, some UK dairy businesses have had to close their doors. For example, Anglesey-based own-label cheesemaker Mona Island Dairy appointed administrators after failing to secure sufficient short-term funding to sustain production.

In light of these challenges, it is essential for dairy farmers to prioritize investments to build climate resilience and ensure the long-term sustainability of their operations in the food and beverage industry.

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