Dairy farmers across Scotland are facing a severe financial crisis as the price they receive for their milk has fallen below the cost of production, threatening the viability of their businesses.

The Johnstone family, who took over a dairy farm in south-west Scotland two years ago, are among those struggling. They reported that the price they receive from dairy giant Arla for each liter of milk had plummeted by 25% in the last three months. Currently, it costs them 38.5p to produce a liter of milk, but they are only receiving 35.7p. This has forced them to consider drastic measures, including selling their milk directly to local customers or exiting the dairy farming industry altogether.

The National Farmers Union for Scotland (NFUS) described the recent downturn as "unprecedented" in both speed and scale, although the sector is accustomed to fluctuating prices. Arla attributed the price slump to a global oversupply of milk, coupled with flat demand for milk and dairy products like cheese and yogurts. This imbalance between supply and demand has created a challenging market environment for dairy farmers.

The dairy industry plays a significant role in the Scottish agricultural sector and the broader economy. Dairy farms contribute to rural employment and support related industries such as feed suppliers and transportation services. The current crisis raises concerns about the long-term sustainability of dairy farming in Scotland and its potential impact on the rural economy.

Looking ahead, the future of dairy farming in Scotland hinges on addressing the supply-demand imbalance and finding ways to improve profitability for farmers. This could involve exploring new markets, developing value-added dairy products, or implementing more efficient farming practices. The industry may also need to consider adopting innovative technologies, such as precision dairy farming techniques that use data analytics and automation to optimize milk production and reduce costs. Government support and industry collaboration will be crucial in navigating these challenges and ensuring the survival of dairy farms in Scotland.