Editor's View: Farm business growth is a game with no end
The movement of the tides, day following night, and politicians falling below expectations. All of these are inevitable and we have no control over them.
To that list I would add the continual increase in the size of farming businesses.
At the Dairy Industry Newsletter conference last week – an event for the whole dairy supply chain – the statistics were laid out again for farmers in that sector by Kite Consulting’s Becki Reay.
See also: NFU warns cattle permits could curb farm investment
About the authorAndrew MeredithFarmers Weekly editorAndrew has been Farmers Weekly editor since January 2021 after doing stints on the business and arable desks. Before joining the team, he worked on his family’s upland beef and sheep farm in mid Wales and studied agriculture at Aberystwyth University. In his free time he can normally be found continuing his research into which shop sells London’s finest Scotch egg.Contact:
Milk producers in Great Britain now number just over 7,000, with a long-term average of 3-3.5% of farmers exiting a year (although the past 12 months have been below that).
Were that trend to continue, we’ll be well under 5,000 dairy farm businesses by 2036. Already, half of cows this side of the Irish Sea reside in herds over 300 in size, with the average now about 230.
What I have been wrestling with since is whether this matters, and to whom – not just for dairy farmers but for agriculture as a whole.
Here is the argument in favour of ever-fewer farmers: Pro-expansionists would say it means that more land and operations should fall into the hands of those who get the best return on money invested and improve productivity the fastest.
This helps agriculture to progress more quickly, benefiting society at large.
Output goes up, food stays affordable, and a bigger business is more able to absorb the cost of meeting ever-higher standards.
Economies of scale mean you can sometimes extract a better price for your inputs and perhaps a superior contract for your output than your smaller counterparts.
Were we to impose limits on farm size, who could define where the limits should be? Easier to allow indifference and just let it happen.
Oh, and if you’re the type of person that is minded to swagger, being the big dog in your parish means you can carry yourself a certain way in the pub, at your NFU branch meeting or each time you wave to a neighbour from the seat of your Range Rover.
I think we have more of an admiration for tycoons in this country than perhaps our farming friends in Europe do; they are much more wedded to the co-operative model.
Nor is Farmers Weekly neutral in this.
Our continual coverage of productivity-enhancing methods and products, such as some of those in this week’s Dairy Update, is helping propel greater output and profit for the businesses to whom it is relevant, enabling growth.
But I suspect many of our readers will share my own uneasiness at this endless march of consolidation towards an ever-smaller number of larger-business owners.
And the arguments against are also straightforward to muster.
Farming sectors in other countries that are further down the consolidation path hardly make it look like a destination we should be in a hurry to get to.
So much for scale in the US – its beef herd is the smallest since 1961 and its arable sector is living from one bailout to the next.
This is the problem: it is a race with no end that only benefits those who can perpetually keep a gap between them and the pack.
