Dairy Farming

I

Introduction

Dairy Farming, section of agriculture that concentrates on the management of dairy cows for the production of raw milk for processing into pasteurized fresh milk or manufactured dairy products for human consumption.

Well-structured dairy farms are found in Australia, New Zealand, North America, and western Europe, where production matches the Western levels of high consumption. Almost 70 per cent of the world’s total supply is sourced from these areas. Milk is consumed fresh (whole or reduced fat) or manufactured into butter, cheese, milk powder (a major constituent of chocolate), and fresh dairy products, such as yoghurt, cream, and fromage frais. Each of these markets is divided into sectors such as soft and hard cheeses. The dairy industries of New Zealand and Australia are mainly concerned with the manufactured product, much of which is exported. Those in the United Kingdom, the rest of Europe, and the United States sell large volumes of fresh milk.

II

United Kingdom

Dairy farming in the United Kingdom is essentially a grass-based operation and tends to be the dominant form of livestock production on lowland farms on the wetter, western side of the country. In past decades almost every farm in the United Kingdom supported a small herd of dairy cows. However, advanced technology has dramatically lowered the unit cost of production in large herds. This has forced farmers, particularly those in less favourable upland areas, who were unable to take advantage of these economies of scale, to concentrate on alternative livestock enterprises such as beef cattle or large flocks of sheep.

In 1956 there were 170,000 registered dairy holdings in the United Kingdom, but by 2002 this had reduced to about 30,000. Over the same period, however, the average volume of milk sold each year rose dramatically from 25,000 litres (5,500 gallons) per farm to about 450,000 litres (99,000 gallons).

A key factor that helped to concentrate production on relatively large units was the development of sophisticated milking machinery from the late 1950s onwards. Another important advance was the change of winter feed from sun-dried grass or hay towards ensiled, or preserved, grass or silage. The new milking machines meant that one person could milk at least ten times as many cows in an hour, and the change in winter feed meant that large quantities of high-quality winter feed could be preserved without relying on elusive warm, dry, summer weather.

In 1994 the average-size British dairy farm was 64.7 hectares (160 acres). In structure, this lies midway between the typically extensive, large-scale units of Australia and the United States, and those on the European mainland, where part-time husbandry and a peasant-style approach to mixed management means small herds of 6 to 12 cows still persist in many areas. The average British farm carries 70 cows with an average annual yield of 5,200 litres (1,144 gallons) per cow. European Union (EU) quotas apply to all farms, large or small. The large farms work on lower percentage margins than those running small dairy herds. Many small farms are abandoning dairy operations as the children of farmers are less likely to take on farm work. The smaller farms often have outdated machinery and find it increasingly harder to compete. This means that the larger, more efficient farms retain their economic advantage. This trend is of concern because it could lead to the depopulation of those upland areas that still support some dairy herds. As a result, the European Commission has delayed the adoption of bovine somatotrophin (BST), as this encourages higher production from fewer cows, which under a quota regime ultimately means fewer dairy farmers (BST was eventually suspended in the EU in 1994, and finally banned from 2000). Until November 1, 1994 farmers were statutorily obliged to sell their milk to a milk marketing board, the largest being that for England and Wales. Milk boards were funded by dairy farmers through deductions from their milk payments, and were independent of government control. The system was then deregulated to equate with other European countries.

Under the new regulation, farmers can contract to sell their milk on the open market directly, either for milk processing or to a marketing agent. Roughly 85 per cent of farmers have decided to use an agent (the largest being Milk Marque which took over the majority of the assets of the former Milk Marketing Board) because they felt this was more competitive and raised their chances of securing higher prices.

III

Cattle Diseases

Cattle diseases can have a significant effect on dairy farmers, and occasionally dairy produce markets. Herds were decimated in the 1960s by the slaughter policy implemented to control foot-and-mouth disease (an even greater slaughter followed an outbreak in 2001). Undulant fever (brucellosis, or contagious abortion) has been all but eliminated from Europe, again as a result of a slaughter policy. European herds are constantly monitored for tuberculosis, which is controlled by isolation and slaughter.

UK herds, and a few in other countries, became infected with bovine spongiform encephalopathy (BSE) in the late 1980s and the 1990s; the concentration of BSE cases in UK herds has raised questions concerning the cattle feed industry and the compulsory treatment of cattle with organophosphate insecticides (see Pest Control). The BSE slaughter programme incurred heavy costs for both dairy farmers and taxpayers: the UK government spent £4.6 billion on eradication measures that included the killing of 4.4 million BSE-infected cattle and their calves before the worst of the crisis finally lifted in 1999. While the major impact of BSE concerns beef, unproductive dairy cows can no longer be slaughtered for use as manufactured meat, but are incinerated.

IV

Product Trends

Shifts in consumer purchasing habits may mean that farm-gate milk prices will come under increasing pressure. In 2002, out of a total national production of 14 billion litres (over 3 billion gallons) a year, just over half was sold as whole milk to households, with the balance offered either for manufacturing into hard cheeses or butter, for processing into fresh milk products such as yoghurt, or for confectionery.

Traditionally, whole milk for retailing has been sold at a premium, but supermarkets, which now account for at least half of national sales, have been discounting it as a loss leader—that is, sold cheaply to entice customers into the stores. There are fears that as a result wholesale prices must eventually be reduced and dairy farmers’ incomes cut.