Modernisation, Cow Comfort Priority Investments

For the first time in the survey, dairy farmers were asked, if they were given £1000 per cow to spend over the next two years, where would they invest. The answers show that just over half of the money would be spent on modernising buildings and equipment and cow welfare, with the remainder split between business expansion, NVZ compliance and reducing debt.

When it comes to the amounts farmers are really planning to invest, a confident message came out with more farmers planning to invest more. 24 per cent were planning to spend £50,000 - £150,000 over the next five years, and 13 per cent plan to invest £150,000 - £500,000; this is a seven per cent increase on last year's survey. Only 12 per cent said they were planning to invest nothing, a considerable decline from the 35 per cent recorded in 2011.

In another new question in the survey this year, farmers were asked how adequate this level of investment was to the farm business. Three quarters of those asked said that the amount they were planning to invest in the next five years was adequate or more than adequate. But this leaves a quarter feeling that their investment is not sufficient to cover the needs of the farm business.

According to AHDB analyst Julie MacLeod: "For those that are unable to invest sufficiently in their business, the biggest problem is that their business is not generating enough profit to put into investment. Other factors include uncertainty about the long term viability of the industry, and difficulty borrowing money."

Mrs MacLeod continues: "To some extent the survey reflects the market conditions and the general industry sentiment at the time it was done, which was prior to the milk price changes we have seen in the last month. However, over the years we have seen that it is a reliable indicator of trends.