Meeting extra dairy demand will prove a costly business

It may be hard for farmers to look beyond the unprecedented fodder and cash-flow crisis, but the abolition of quotas in 2015 will open opportunities for them to grow their business for the first time in 30 years.

This coincides with major world population growth, which augurs well for dairy demand, with two billion more inhabitants by 2050 and fast-rising, affluent middle-classes in emerging countries.

The investment required on farm and at processing level to deliver the 50% extra milk projected under Food Harvest 2020 is happening in a difficult financial environment. Margins at every level of the chain are affected by milk price volatility, and increases in production and processing costs.