By Debbie James

Renewed confidence has led to higher levels of investment in the Pembrokeshire dairy farming sector, according to a new farm incomes report.

The 2017/18 Wales Farm Income Booklet, published by Aberystwyth University, points to a profitable year for dairy farmers across Wales, despite difficult weather conditions over a prolonged period, resulting in higher feed and housing costs.

Of the 550 randomly selected farms that participated across all sectors, there was an average milk price increase among the 111 dairy farmers surveyed of 6 pence per litre (ppl), although there had been “huge variations’’ in price, according to Tony O’Regan, director of the Farm Business Survey in Wales.

Poor weather conditions for most of 2017, culminating in snow in the spring of 2018 had led to increased supplementary feeding and higher fodder costs due to extended housing but this had resulted in higher milk yields, and cull prices had held up well, said Mr O’Regan.

“Overall the sector had a profitable year and reinvestment increased as a result,’’ he said.

Dairy farms with the highest stocking rate were more profitable.

For dairy farms in lowland Pembrokeshire, the average stocking rate was 2.37 (grazing livestock units per adjusted forage hectare) but top performers stocked their farms at 2.64.

The pattern was repeated for hill and upland dairy farms, where the average stocking rate in the top third was 2.42 and the average 2.16.

The survey highlights large performance differences – for dairy farms, the top producers made a net margin of over 9ppl more than the bottom third while for cattle and sheep farms, the profit for the top third was more than double that of the average.

With plans to phase out the Basic Payment Scheme in Wales from 2021, the survey brought into sharp focus the reliance of some businesses on this payment.

Together with other subsidies and income from diversifications, for hill sheep farms it accounted for 44 per cent of outputs and 167 per cent of profits.

“It is difficult to see how many Welsh farms can be profitable without relying on non-farming income and post-Brexit support payments,’’ Mr O’Regan commented.