1. Scenario 1: Big Farm Business Biodiversity is declining, water pollution and waste management is improving. Soil health remains at a similar level to the previous decade. Renewable energy has mitigated carbon emissions somewhat, but the growth of exports and higher numbers of cattle fight against this. Environmental footprint Value added dominates. Value added vs. Liquid milk Industry is growing, but is being challenged by development of synthetic foods. Growth of industry (domestic and export Dairy products are in demand in the UK and around the world, and Britain is considered one of the best sources of liquid milk in the world. But with food becoming increasingly modified and processed, dairy analysts are warning that the industry faces a challenge from more synthetic products in the next 10-20 years. Demand for dairy (domestic & export Yields are maximised. Liquid milk is not popular as a product in its own right as processed and enriched milk products are demanded by consumers. But liquid milk as a commodity for processors is big business in the UK. Yield/availability of liquid milk Larger herd sizes, and several herds are often managed as part of bigger dairy farm businesses. Size of farm (herd size) Mixed, though largely indoor in winter. Mostly forage. Housed/pastured and forage vs. feed Decreasing, in the form of the traditional ‘farmer’. But a rising number of specialists (such as renewable energy technologists or genetics specialists) and dairy farm managers (essentially business managers) as UK dairy grows in importance and size. Numbers of ‘farm hands’ rises. Number of farmers Highly competitive, but high quality products (specifically adapted for use, such as high-protein liquid milk for cheese) are paid well. Milk price

2. Scenario 2: The caring global consumer Increasing carbon footprint due to growing export market. On farm biodiversity, water pollution, soil health and waste management all improving due to strong sustainability standards Environmental footprint Value added dominates Value added vs. Liquid milk Moderate growth, particularly export markets Growth of industry (domestic and export Moderate demand from both domestic and export markets, strong competition from dairy free alternatives Demand for dairy (domestic & export Focus is on high standards not yield: domestic supply is not meeting current demand. UK milk needs to compete against high quality and generic imports. Yield/availability of liquid milk On average larger herd size, although this varies Size of farm (herd size) Mixed Housed/pastured and forage vs. feed Increasing – attracted by higher milk price – although many potential farmers put off by the onerous bureaucracy. Increased mechanisation also dampening growth. Number of farmers Farmers paid premium for quality of milk covering cost of production and a margin for investment. Costs passed onto demanding consumer. Milk price

3. Scenario 3: Efficient nutrition Industry is smaller so footprint is smaller. Focus on efficiency is helping to conserve water and eliminate waste. Switch to renewable resources for energy supply in places is having a positive but patchy impact on reduced C02 emissions. Wildlife is not a focus and biodiversity is in peril. Environmental footprint Nutritionally dense liquid milk and value added tailored products to individual needs Value added vs. Liquid milk Industry smaller. Bureaucratic, limited export market. Growth of industry (domestic and export Less demand, milk not seen as providing nutritional benefit compared to sophisticated food supplements. Demand for dairy (domestic & export Less milk available as dairy farming not economically viable Yield/availability of liquid milk Mostly larger, more intensive – although farmers that have highly diversified incomes have smaller herds Size of farm (herd size) Majority housed. Imported feed prohibitively expensive. Housed/pastured and forage vs. feed Fewer Number of farmers Does not cover cost of production. Many farmers go out of business or diversify to supplement income. Milk price

4. Scenario 4: Back to basics Smaller industry – smaller footprint. Strong focus on ecosystem services leading to integrated approaches, with biodiversity, water pollution, soil health and waste management all improving due to strong standards. Supply chain impact improving as dairy moves away from imported feed. Environmental footprint Value added dominates. Value added vs. Liquid milk Low growth domestically. Export growth focused on added-value products and GM-free. Growth of industry (domestic and export Lower domestic demand overall; higher demand for high added value products. Moderate export demand for GM-free and high quality, gourmet products. Demand for dairy (domestic & export Focus is on high standards and added value rather than yield. Liquid milk available locally except for some of the south east. Yield/availability of liquid milk Ranging from micro-dairies to medium sized herds, with a higher number of small-scale farms, so a smaller average herd size, approx. 80 cows. Size of farm (herd size) A mixture of systems, with an overall preference for pasture-based. Higher level of openness about chosen system, high animal welfare overall. Forage preferred to feed where possible; UK-grown feeds replacing imports. Housed/pastured and forage vs. feed Decline in numbers nearly stabilised. New entrants attracted by higher milk price, lifestyle, and opportunities in new business models - not all are successful. Number of farmers Covers costs of production most of the time, added to by diversified incomes and ecosystem service payments. Milk price