There’s been a lot of attention given recently to the amount dairy farmers are paid for their milk, particularly in the UK.
Amid an over-supply of the drink and dwindling global demand, Dairy Crest announced that it was to lower the amount it pays farmers on a liquid contract by £0.014 per litre – and Müller UK & Ireland soon followed suit, albeit offering a slightly lesser reduction. The news won’t help dairy farmers to turn a profit – but analysis has shown that the industry produced 40 pints more for every consumer during the past 12 months than it did in the same period two years ago.
But now, signs are emerging that farmers are beginning to fight back.
Orchestrated protests across the country have seen farmers empty the shelves of some supermarket stores in protest at the continued threat to their livelihoods. The BBC cited statistics this week that suggests dairy farmers lose £0.07 for every litre of milk they produce, and some producers have recounted stories of having to sell cattle in order to reduce some of the loss in their profit margins.
Companies like Dairy Crest and Müller contend that the sector will only survive by adding as much value to the milk it produces as possible – but farmers say that consumers are ready to back them by paying more for their daily milk.
And it finally appears as though retailers are now willing to explore this argument, as they struggle to fend off the negative publicity that this widely reported issue has attracted. Firstly Morrisons, whose £0.89 four-pint bottle of milk put it at the very centre of the row on milk prices, agreed to sell a new brand of milk alongside its current offerings that would offer consumers the chance to support British dairy; the brand will give an extra £0.10 to the farmers for every litre they produce and will retail at a price point £0.23 higher than currently stocked. This would be enough to allow milk farmers to turn a £0.03 profit in every litre, according to those BBC figures.
Then Asda revealed that it would rise the price it pays to farmers to a level that will “assist” them. The supermarket committed to paying £0.28 per litre for all of the liquid milk sold in store, and the National Farmers’ Union said that it was glad Asda had chosen to recognise the “plight of the dairy industry” in its “hour of need”.
And today, Aldi has also opted to commit to a £0.28 per litre rate. All three supermarkets had pledged to offer more than the average £0.2366 per litre that farmers receive for their milk, The Guardian reported on Friday.
I don’t know that the new prices will do anything to address the disparity between supply and demand – but it will be interesting to see if consumers take to the more premium-priced milk, and whether the dairy sector can recover slightly as a result.
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