Download - DairyCo - Farmer Intentions Survey 2015
Farmer Intentions Survey 2015
Luke Crossman
Senior AnalystAHDB Market Intelligence
Background to the survey
• Used to investigate:– Confidence in own farm and industry
– Production and investment intentions
• Conducted annually since 2004
• Representative survey of 850 dairy farmers across GB by herd size and region
• Results weighted to national profile using Precision Prospecting dairy producers data
Timing of the survey
• December 2014
• Complete reversal of previous year:
– GB farmgate prices around 20% lower than
previous year
– Global supply/demand imbalance
– Further pressure on prices, short-term
– Long-term message still positive
Important to remember
• Variation in farmgate prices so vast
• December 2013
– 3.73ppl between top and bottom
• December 2014
– 11.93ppl between top and bottom
How milk is paid forBased on estimated milk volumes
60%23%
17%
Buyer discretion
Market related (e.g. Arla, Dairy Crest/DCD formula)
Cost related (e.g. Tesco, Sainsbury's)
Since the surveyThe impacts on confidence
• Situation with First Milk
• Potentially more positive short-term future
wholesale price signals
– GDT auction continues to provide glimmer of
hope
Weighted average GDT prices
0
1,000
2,000
3,000
4,000
5,000
6,000
Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14
$/t
on
ne
Source: GDT platform
Confidence in own businessnext 12 months
0%
10%
20%
30%
40%
50%
60%
ExtremelyPessimistic
Pessimistic Neither Pessimisticor Optimistic
Optimistic Extremely Optimistic
2013 2014 2015
Confidence in own businessnext 5 years
0%
10%
20%
30%
40%
50%
60%
ExtremelyPessimistic
Pessimistic Neither Pessimisticor Optimistic
Optimistic Extremely Optimistic
2013 2014 2015
Confidence in the industrynext 5 years
0%
10%
20%
30%
40%
50%
60%
ExtremelyPessimistic
Pessimistic Neither Pessimisticor Optimistic
Optimistic Extremely Optimistic
2013 2014 2015
Confidence breakdown
3.37
3.50
3.78
3.50
3.73
3.47
3.80
3.88
3.92
3.93
3.00 3.10 3.20 3.30 3.40 3.50 3.60 3.70 3.80 3.90 4.00
GB
Less than 1 year
300+
Under 30
Maximisers
Business Industry
Confidence in Voluntary Code
0%
5%
10%
15%
20%
25%
30%
35%
ExtremelyPessimistic
Pessimistic NeitherPessimistic or
Optimistic
Optimistic ExtremelyOptimistic
Don't know
2014 2015
Investment intentionsPast vs future
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Yes No Unsure
2014 2015
Investment intentionsPast 5 years investments
76%
24%
Yes No
Investment intentionsPercentage of those investing
4%
6%
62%
46%
7%
11%
0% 10% 20% 30% 40% 50% 60% 70%
Farm Diversification
Renewables
Buildings
Equipment
Land
Livestock
Production intentionsnext 2 years – excluding “Don’t know”
6%2%
60%
33%
Leave milk production Decrease production Stay the same Increase production
Production intentionsnext 2 years – who’s increasing?
6% 2%
58%
34%
England
5%2%
70%
23%
Scotland
5%1%
60%
35%
Wales
Production intentionsnext 2 years – who’s increasing
27%
38%
33%
47%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
10-99 100-149 150-299 300+
Production intentionsnext 2 years – who’s increasing
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
10-99 100-149 150-299 300+
Herd size
2014 2015
Production intentionsnext 2 years
4% 6%
54%60%
31% 33%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Leave the industry Maintain current level of production Increase production
Production outlook*
-15%
-10%
-5%
0%
5%
10%
15%
05-07 06-08 07-09 08-10 09-11 10-12 11-13 12-14 13-15 14-16 15-17
Actual Survey Estimate
*based on farmer views collected in December 2014 regarding intended production levels over the next two years
†
†actual production will of course be conditional on weather and market conditions
Summary
• Short-term confidence has taken a knock
• Long-term confidence fairly strong
– Both in industry and own business
• Potential issues over understanding of
Voluntary Code
• Production set to increase
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