Increased production costs and labor shortage ails UK dairy sector, flags Arla Foods’ data

25 Sep 2024 --- Arla Foods Group’s latest survey of UK dairy farmers reveals mounting pressures in the food and farming sector due to a labor shortage. Over 56% of the farmers say it is more difficult to hire staff, as some 86% of those surveyed say their job postings have garnered very few to no applicants with the desired skills.

The dairy cooperative says farmers, on average, are paying staff 27% more than at the end of 2019, before the pandemic and the end of the free movement of people from the EU. Increased production costs have led to a spike in food prices. One in 12 farmers (8.5%) are tackling costs by scaling back production. Some 16% warn they will consider leaving farming if costs do not stabilize.

Bas Padberg, managing director at Arla Foods, says: “Our farmers have told us for some time that they are facing real challenges with the state of the labor market. This new data reveals their concerns and the potential impact on food prices and security.”

“If we want our farmers to continue to put food on the table in millions of homes around the country, they need help. We’re calling on the government and industry to bring people into our exciting sector and give them the skills and equipment they need to be fully productive. What ministers have said about driving growth and supporting training is positive; we need to go further and faster.”

Recruitment challenges

The company notes that attracting the right workers with skills suited to the modern manufacturing environment is a challenge ailing the F&B industry. It is harder to hire more women and youth in the sector. Moreover, the technology that can be leveraged to find workers with expertise and experience in automation expertise is also inadequate, adding to the crunch.

Attracting the right workers with skills suited to the modern manufacturing environment is a challenge ailing the F&B industry.The dairy giant urges the UK government to reduce administrative pressures on farmers by simplifying bureaucratic documentation, supporting upskilling and increasing investment in automated farming tech.

“The challenges in recruiting suitably skilled people into the food supply chain is becoming increasingly harder. With advancements in technology and automation, we should be getting more efficient, but we still need the right people with the right skills to have a workforce that is fit for the future,” says Fran Ball, vice president of production at Arla Foods.

The Danish multinational says gender diversity is crucial to the stability of its supply chain. Still, more support is needed to make the dairy sector an attractive career choice, especially among younger demographics.

Arla calls on the government to expedite changes to the Apprenticeship Levy (a UK tax on employers) to enable the movement of funds for training and upskilling purposes.

David Christensen, an Arla farmer, says the problem of a lack of labor has been around for years and is now getting worse. “We need schools, parents and career advisors to recognize the benefits of working in the food and farming sector and share them with young people. Because in the end, it is people who will deliver a thriving food and farming sector that feeds the nation and contributes to the growth of our economy.”