Dairy farmers in crisis as price of milk falls

Dairy farmers across the UK are in crisis as they struggle to sell milk for more than it costs to produce. 

Some farmers are getting as little as 25p per litre for milk which costs 30p per litre to produce.  The fall in prices is forcing dairy farmers across the UK out of business at a rate of three farms per week.  Since 1996 the number of dairy farmers in the UK has decreased to less than half 34,570 to 14,500 today. 

As the price of milk falls, small farms that have often been in families for generations can no longer afford to keep running.  The implication for the countryside could be huge as small pastures are sold for development and buildings and land are no longer maintained.  Some predict that only large US style ‘mega farms’ will survive in this market where up to 8,000 cattle are kept indoors.

The fall in the price of milk has been blamed on a supermarket price slash to boost profits.  In June the main buyers including Dairy Crest, Robert Wiseman and Arla cut prices by 2p per litre and plan to cut them further 2p in August.

These buyers supply milk to all the major retailers, who have continued to cut their prices meaning that some supermarkets able to offer four pints for less than £1. Whilst the retailers have been passing the price cuts onto the consumer, they have also been awarding themselves a larger margin of up to 15p per litre to boost profits. 

On Friday desperate farmers blockaded Arla’s processing centres in Ashby-de-la-Zouch in Leicestershire and Leeds and the Robert Wiseman Dairy in Bridgewater Somerset to protest against the cuts.

David Handley from Farmers For Action warned that farmers will refuse to sell milk for such a derisory sum.“Ultimately, there will be no fresh milk, because if we do not get our cost of production, we will throw it down the drain. Let’s see how the retailers explain that to their customers, when there is no milk on the shelves.”

Although the buyers have been the target of blockades, the major retailers have faced criticism for playing the processors off against one another to bring down prices.  Morrisons, the Co-operative and Asda are selling milk under the cost of production at around 27p per litre.

Retailers have defended themselves by saying they are doing all they can in the tough economic climate and against discount outlets undercutting prices.  However, campaigners believe this is no excuse and urge consumers to show their support by choosing retailers who sell at more than the cost of production (30p per litre) such as Marks and Spencers, Sainsbury, Waitrose and Tecos.

To join the campaign on Twitter, go to #sosdairy.

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