Welsh farming can deliver prosperity, but individual success depends on controlling costs, a sure understanding of global positioning, and learning how to make a profit without the benefit of the Single Farm Payment. The uncompromising message was delivered to the Future Farmers of Wales Annual Conference, titled ‘Meeting the Market with the Single Farm Payment’, held at the Royal Welsh Showground.

Chairman Will Pritchard of Letterston, Haverfordwest, said the three speakers had provoked new ideas and a lively debate. De Laval International UK Sales Manager David Gordon had set the scene by giving the global dairy marketing perspective. Hybu Cig Cymru development manager, Prys Morgan, had urged attention to detail in terms of cost cutting.

“All three provided the basis for a lively and stimulating conference which will have changed the way that many people think”, said Mr Pritchard. “But probably the one thing we will all have come away remembering is the comment by Tony Evans, a partner with Andersons Consultancy.

“He suggested that we had picked the wrong title for the theme of our conference. It should have been ‘Meeting the Market WITHOUT the Single Farm Payment’. That struck a chord with us all. It is the way we will have to live.

“He also made the point that farmers should only diversify if the core business is in a solid position. It shouldn’t be a means of escape”.

Prys Morgan told the Future Farmers that against the background of a diminishing Single Farm Payment, beef imports that had risen from 297,000 tonnes to 520,000 tonnes in the last ten years and 185,000 tonnes of UK meat due to come back into the food chain with the lifting of OTMS, costs had to be addressed. He added that, contrary to the general view, sheep producers weren’t reducing ewe numbers. Production was predicted to increase from 306,000 tonnes last year to 319,000 tonnes.

“You need to reduce costs or increase output for the same costs”, he said. “A third of you are doing that already so it must be achievable. There is a huge disparity between the top third and the bottom third.

“Cost savings can be made but you have got to have the right attitude. Are you really paying attention to detail? Look at areas for improvement. Set targets and work to those targets. Put a little bit of thought into it”.

And he cited on farm examples which showed a difference in returns of £27,521 on farms with an average 675 ewes producing 823 lambs (122%). The lambs were all sold at 38kg but the costs for the top third of producers amounted to £30,023 while the costs for the bottom third were £57,544.

David Gordon told the conference that De Laval was still a family owned company, part of the Tetra Laval Group which employed 30,000 people worldwide and had a turnover of 9 billion euros last year. The developing world was hugely important to the dairy business, to the extent that the speaker originally due to address the conference, strategic marketing director Michael Hughes, was now Managing Director of DeLaval in China.

He warned that, within the EU, the era of a protected market was over. Producers would have to live with a lower and more volatile milk price. There was a future for dairying in the UK, but it was a very different future.

“Farming as a way of life is bad business”, he warned. “But farming as a good business is a good way of life. I think there is a future for the family farm. It is well placed to make a profit. Very large units with high rates of labour will find it more difficult.

“In ten years, the number of dairy herds in Great Britain has halved and there are now about 16 or 17,000. But the number of cows has not decreased as much as the number of operators. We are producing the same amount of milk but with a lower number of producers and fewer cows, but with higher yields”.

Pressures on DeLaval included having to cope with increased production in the developing world and learning from what had been achieved in the developed markets. Mr Gordon added that a lack of skilled labour in developing areas meant there was a lot of opportunity for those who wanted to go abroad to work.

Future Farmers of Wales President, Dai Davies, said a broad spectrum of advice had been delivered, giving important indicators as to the changes and challenges taking place in agriculture.

“Each speaker was positive about the future”, he added. “And repeated that if farmers were prepared to accept the changes and adjust to the new requirements and opportunities then they would succeed”.

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