HAVING someone in line to take over a dairy farm is one of the biggest single factors affecting the future of the business, a new report has found.

According to the latest DairyCo report on the reasons why dairy businesses makes changes, those with a successor in place were considerably more likely to be looking to increase production than those without.

Despite common perceptions, milk prices were found to have only a weak impact on business intentions.

DairyCo/AHDB senior analyst Patty Clayton said: “It was found that farms achieving a higher milk price were no more likely to expand than other producers, but there were other factors such as succession that had greater significance.”

Cost of production levels were found to be a major driver influencing decision making, as they account for the majority of variation in profit levels.

But, while farms with high levels of profit were more inclined to consider expansion, farms with low profit levels were just as likely to expand as to exit the industry.

Herd size was not found to be a significant factor in decisions to expand or exit the industry and there was no difference in the average size of herds looking to make those decisions.

The report ‘The structure of the GB dairy farming industry – what drives change?’ commissioned by DairyCo and undertaken by Andersons, is available to download from the DairyCo website www.dairyco.org.uk.