British dairies face steep climate resilience costs

With extreme weather events becoming more common in the UK, dairy farmers need to improve their capacity to store silage and slurry while keeping on top of production costs.

According to a new report compiled by British consultancy Kite Consulting, dairy farmers would need an additional 2.4 pence per liter of milk a year for 10 years in order to cover the costs of infrastructure improvements needed to achieve climate resilience.

The estimated costs, amounting to more than £3.9bn ($5bn in current currency terms) or £472,539 per farm, over 10 years are based on an analysis of data from over 850 UK dairies, with costs per farm based on an average herd size of 236 housed for an average of 30 weeks.

Kite has estimated that farms need to have one and a half years’ worth of silage storage to account for drought or late grazing turnouts while slurry storage of more than 8 months is needed if farmers were to minimize risk of water pollution and meet nitrogen limits.

The consultancy found that farms currently have forage capacity for one winter and where farms have additional capacity, it is often in need of significant investment in order to meet Silage, Slurry and Agricultural Fuel Oil regulations, meaning that expensive infrastructure improvements would likely be required.

As for slurry capacity, Kite found that two thirds (64%) of farmers had less than 6 months of slurry storage, with just 15% equipped to store slurry for 8 months or longer. The consultancy noted that older stores – built before 1991 – were exempt from SSAFO regulations but added that improvement notices can be served at any point for these if the authorities believe they pose a significant pollution risk.

Only 8% of farms in the sample had covered slurry stores, with estimated 65% of slurry contained in lagoon structures and 30% - in towers, with the remaining 5% stored under buildings, according to the analysis.

To allow for sufficient storage in years of extreme weather, Kite estimates that 85% of UK dairies need to invest in slurry storage to reach its 8-month benchmark for climate resilience.

Kite’s report, which can be obtained for free from the consultancy’s website​, suggests that an average farm would pay more than £40,433 ($52,580) per year on average to achieve climate resilience, or a total of £404,338.90 ($518,542.40) over 10 years on average. With slurry and silage storage improvements forming the two largest investments, Kite estimates that slurry improvements would average at £92,296 ($118,364.54) per farm while silage clamps would come up to £204,450 ($262,195.88) on average. Per liter of milk produced, that’s £0.020 on average per farm.

When land payments – to cover additional land requirements where it’s needed for new slurry and silage stores - are added to the equation, the total average cost of resilience over 10 years comes up to £472,539 ($606,005.28), or £47,254 ($60,600) per year on average.

“UK dairy farms require a total investment of over £3.9 billion to help mitigate against climate change and to protect the environment through meeting current and future regulations,” Kite’s report concludes.

“This requires an additional 2.4 ppl over the next 10 years, on top of the cost of production for dairy farms. Without this investment, the industry will be unprepared for extreme weather events. This is likely to jeopardise the future of some of these farms and put milk production at risk. Investment from the industry is therefore critical to ensuring the secure supply of milk."