The twin challenges of labour availability and cost, alongside higher feed, fuel and energy bills, are likely to drive structural change in the dairy sector next year.While many have made decent profits over the past two to three years, depending on their milk contract terms, the rapid inflation of fuel and fertiliser costs will add 2p/litre to z production costs next year, said Rob Hitch of 2 Cumbria-based accountantDodd & Co.The need to pay more for labour as farming f vacancies compete with an ever-growing rangeof alternative positions in other industries could add a further 1.5-2p/litre to costs - a significant rise, said Mr Hitch. He puts current labour costs for housed herds at about 3.5p/ litre and for grazing herds at about 5p/litre.While the many recent milk price rises are welcome, much of that cash is likely to go to pay those higher fuel, fertiliser and labour bills.
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