The price Tim is being paid for his milk (about 24p per litre) is considerably greater than that paid to US farmers (19p/l) or New Zealand (13p/l). Tim's high price is sustained through the quota system. He complains about its effect on his business, yet if quotas were removed the fall in the price of milk would put very many dairy farmers (and quite possibly their bankers) under great pressure.
Heavy borrowings in farming are commonplace. Banks, finance companies, agricultural advisers and the farming media need farmers to borrow and expand. Tim should look at US farms, where capital is less easily available. They wouldn't dream of spending the money farmers do in this country.
If he owns only 37,000 litres of milk quota and leases 650,000, Tim's on a hiding to nothing. He needs to talk with his landlord, get out of milk - which will release the capital tied up in his cows - equip himself with some cheap machinery and crop the farm.
The best speaker at this year's Oxford Farming Conference said he would love to farm corn and cows like his established neighbours, but he was not born with a silver spoon and didn't have the resources. So he developed an asparagus business, which he could develop using the land and capital he had. Tim should think on the same lines.
Editor, Practical Farm Ideas
Whitland, CarmarthenshireReuse content