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Profits black hole threatens Britain's milk farmers

[Thursday 12 October 2006]

AS we consumers continue to enjoy low milk prices in the supermarkets, Britain's dairy farmers are continuing to struggle for their very survival as a newly released survey suggests they are now receiving even smaller returns for their efforts.

dales cows
Dales dairy farmers face profits black hole

Carried out by the NFU and the Royal Association of British Dairy Farmers (RABDF), the survey reveals that the gap between what dairy farmers are paid for their milk and what it costs them to produce it has widened to almost 4p per litre.

The survey looked at the impact that increasing energy costs and the summer drought have had on production costs.

Based on returns from over 350 farmers, with an average herd size of 196 cows - twice the national average - it shows production costs have increased to around 21p per litre. This compares with an average 17.3p per litre currently paid to farmers.

In response, the NFU is launching a campaign to encourage dairy farmers to invoice their milk buyers for the extra costs that have been incurred.

There is no doubt that the situation faced by dairy farmers is dire; over the last year more than 1 000 - including many right here in the Yorkshire Dales - have been forced out of the business due to their plummeting incomes. The farm-gate price of milk has fallen by 28 percent over the last decade and the NFU believes another 1 000 farmers could leave the industry in the next twelve months.

At a meeting of the NFU's Council, Dairy Board chairman Gwyn Jones said: "The yawning gulf between milk prices and costs is fast becoming a black hole which will swallow up large parts of the UK dairy industry if something isn't done to reverse the downward price trend in the supply chain.

There is much hype from supermarkets on fair trade products - is it unreasonable to expect fair trade for British dairy farmers?

Tim Brigstocke - RABDF

"I urge all dairy farmers to complete their invoices and return them to the NFU so we can put real pressure on the milk processors and supermarkets. I am confident if all dairy farmers support us on this, we'll get a result."

RABDF chairman Tim Brigstocke added: "This survey highlights how dire the predicament of dairy farmers has become. It is imperative the recent exceptional production costs that have been exasperating dairy farmers are recognised and passed further up the supply chain.

"In the past, processors have successfully increased their selling price as a result of raised energy costs. It is about time farmers were treated on an equal footing. There is much hype from supermarkets on fair trade products - is it unreasonable to expect fair trade for British dairy farmers?

"Processors and retailers cannot continue to shrug off the evidence of the drastic need for farm-gate milk price increases and we refuse to let the matter fall under the radar."

Your views:

  • I am outraged that supermarkets and milk processsors ane not paying the dairy farmers a much better price for milk. When we start importing milk into the UK I am sure we will be at the end of civilisation.

    Government must act now to ensure the dairy farmers survive and turn a profit. I will be lobbying my MP to stop this insanity, God help us if we fly milk from continental Europe.

    Eddie Simons - > Ashford, Kent

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