This week's Farm Gate podcast reunited panellists from Land Alive at The Dairy Show at the Bath and West Showground to explore what regenerative dairy looks like in practice and, crucially, how to finance the transition.
ffinlo Costain was joined by Nick Hindle, First Milk's Communications Director, Tamara Giltsoff, Senior Associate at the Soil Association Exchange and co-founder of Land Alive, Niels Corfield, an independent farming advisor & trainer, Harry Farnsworth, who works on financial innovations within the food and agriculture supply chain at Rabobank, and Thomas Slattery, a comms specialist working with the ADOPT Support Hub.
Systemic risk
Tamara Giltsoff opened the conversation with a sobering reality check: systemic risk. Europe is the fastest-warming continent globally, yet the European Environment Agency confirms we're unprepared for growing climate risks.
With Standard and Poor projecting a 90% likelihood of reaching 1.5°C warming by 2040 - and a 50% chance that we are on a 2.3°C pathway - the urgency is undeniable.
"Farmers really are the keystone species of our economy and of our times," Giltsoff said. The solution lies in building landscape resilience, and regenerative dairy offers a practical pathway forward.
Addressing root causes
Niels Corfield has monitored over 200 grazing operations across the UK for soil and pasture health. His findings reveal a widespread but fixable problem: poor pasture health characterised by thin swards with shallow roots and compacted soils with blocky structures.
This compaction prevents water infiltration during winter, leading to waterlogged, poached pastures. Farmers respond by housing animals for longer. The financial impact is substantial: increased housing periods directly translate to higher costs for feed, bedding and energy.
The regenerative solution targets these root causes. By improving soil health and alleviating compaction, land becomes free-draining. Animals can graze outdoors for longer, and soil moisture retention improves for drier summer periods.
"These extreme weather events are revealing an underlying weakness in the system," Corfield explained. The good news, however, is that for every month of additional grazing achieved, farmers can expect savings of £6,000 per 100 head per year.
The interventions are relatively low-cost: mechanical and mineral treatments to relieve compaction, paired with improved grazing management.
Corfield cites examples of farmers in the Republic of Ireland reducing nitrogen fertiliser inputs from 250 units to just 40 units through better application methods, saving €40,000 annually on a modest 200-cow operation.
Importantly, the transition may actually increase yields.
"Most high yield is achieved through quite high-cost operations," Corfield noted. "Yield comes at a cost." By investing in natural capital - soils and pastures - farmers can maintain (or even increase) productivity while significantly improving margins and building resilience to both market volatility and climate impacts.
First Milk's success
Nick Hindle shared First Milk's impressive story of scaling regen dairy. The cooperative, working with over 700 farming families, now has 96% of its milk pool covered by regenerative plans - a transformation achieved since 2021.
More importantly, the 92,000 hectares now under regenerative management have nearly doubled their interventions and actions since 2022.
First Milk's rapid success stems from several factors. As a cooperative, they had natural advantages: member farms suited to regenerative approaches, democratic decision-making processes and unified commitment from board level down. "We went all in," Hindle said. "We call ourselves The Regenerative Co-op. There's no hiding place."
However, success required more than board-level commitment. First Milk invested heavily in member engagement, training and peer-to-peer learning. They created payment mechanisms rewarding regenerative practices and ensured the approach worked "field by field, farm by farm."
Their pragmatic methodology focusses on measurable, rewardable practices - but the focus is on actions that physically deliver the best outcomes.
While outcomes remain the ultimate goal, First Milk recognised that immediate, reliable outcome measures are challenging. They identified clear, deliverable actions linked to carbon removal, water quality, and nature, using these as outcome proxies while the company builds a substantial database for future validation.
"If you let great become the enemy of good, you will not get started," Hindle observed - a philosophy that has clearly paid dividends.
The banking perspective
Harry Farnsworth highlighted why processors and retailers must change: supply chain resilience.
The impact of recent climate disruption on commodities like cocoa demonstrates how quickly supply chains can destabilise and how rapidly costs can escalate.
Beyond resilience, compliance is driving change. Large producers face increasing reporting requirements that cascade down through value chains, creating what Farnsworth calls "collaboration through compliance."
Interestingly, because many on-farm regenerative transitions aren't capital-intensive, banks are focussing on existing debt restructuring rather than new lending.
Rabobank's work with McCain on potato farming demonstrated this approach: offering interest rate discounts on existing debt when farmers implement regenerative practices.
The challenge lies in understanding these new farming systems. Traditional lending models assume three or four clear crop outputs with well-understood inputs and returns. Mixed regenerative systems - particularly those incorporating trees or payment for ecosystem services - require different financing horizons, sometimes spanning five to nine years before returns materialise. "We need several years of financial data to change our risk models," Farnsworth acknowledged.
Innovative finance
The Soil Association Exchange's research into financial barriers to transition, funded by the British Business Bank, gave voice to farmers' experiences. The work called for flexible "nature transition facilities" providing overdraft-style support without penalties during transition periods.
Oxbury Bank Plc, the UK's agricultural challenger bank, responded with remarkable speed. Launched in February, their Transition Facility offers flexible financing at just 1% above base rate with 0.5% fees - requiring only evidence of on-farm transition such as SFI applications or participation in recognised schemes.
The results speak volumes: there have been around 200 approved transition loans totalling £30 million, making it Oxbury's fastest-growing product ever. Farmers are using it for cattle purchases, rotation changes, capital grant bridge financing and experimentation beyond existing support schemes.
"We need to see many, many more of these," Giltsoff stressed, noting that while Barclays has launched a similar facility, development finance banks must do more to support higher-risk, smaller farms already carrying debt burdens.
De-risking innovation
Thomas Slattery, working with the Adopt Support Hub, spoke about the importance of supporting farmer-led innovation.
The Adopt fund - a £20 million initiative from Defra managed by Innovate UK - represents a vital piece of the transition puzzle that addresses a fundamental challenge: much of regenerative agriculture remains innovative and cutting-edge, and innovation carries inherent risk.
"Farmers are natural problem solvers. They want to try new things," Slattery said. Yet the reality is stark: most innovation risk falls on individual farmers operating at the farm level, and that's financially daunting. The Adopt fund addresses this by offering grants of £50,000 to £100,000 specifically designed to de-risk farmer-led trials and innovation.
Within dairy, this could mean trialling innovative rotation systems, testing new feed approaches or working with measurement technology to better understand soil health outcomes. The Adopt scope is deliberately broad, encompassing both practice-based trials and technology partnerships, provided projects are farm-based, practical, and drive profitability, sustainability, or resilience.
Slattery sees opportunity in leveraging digital tools to tap into these networks more efficiently.
The path forward
The conversation reveals a maturing regenerative dairy sector that can deliver practical resilience in the face of climate and economic challenges.
Ultimately however success will require action across the entire value chain - from financial institutions creating appropriate products to processors supporting their suppliers to farmers implementing proven practices.
Communicating these benefits to citizens and customers will also be critical: reframing the message towards what people genuinely care about: delicious food, family health and nutritional quality - all areas where regenerative agriculture delivers.
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