What retailers pay for milk revealed
Some dairy farmers will see an increase in the price they receive for their milk as price rises kick in from 1 November.
But, many are yet to feel the impact of farmgate milk price increases, more of which will be needed before Christmas for producers to maintain the status quo.
In July, Farmers Weekly put together a milk price league table featuring the 10 largest UK supermarkets, revealing what their farmer suppliers were paid and what price consumers were charged for milk.
This week we’re revisiting the issue to see what has shifted since then. At first glance the landscape looks to have changed. However, as any dairy farmer will know, the increases we see on paper don’t always tell the full story.
Feed costs have continued to rise since milk campaigning began, and while retailers and processors, to their credit, have made some effort to bridge the gap between farmers’ costs and income, it is clear that dairy farmers are not out of the woods yet.
The table also only covers liquid milk purchased by retailers and not middle ground or convenience shops, or milk for cheese.
“A lot of the milk price increases have really yet to take effect in terms of materialising in the milk cheque,” said NFU dairy adviser Luke Ryder.
“The same situation still stands in terms of overall costs, feed quality and forage availability – the problems are very much still there.”
Although it was difficult to quantify the current cost of production – last estimated to be at 31.5p/litre in September – there was still a gap between that and the price paid to some farmers, he said.
“I do believe that there is an expectation that there need to be more price increases this side of Christmas, that’s for sure,” said Mr Ryder.
“Milk supply is really starting to tighten at the moment but there is no incentive at this time for producers to increase production – that needs to be reflected in the price paid to farmers.”
The need for honesty and clarity was an issue Farmers Weekly raised in July, and compiling this week’s table, we found many retailers were more open and willing to talk about their supplier relationships.
However, one interesting fact revealed in the latest milk price table is that despite everyone’s costs rising, only one major retailer has increased the retail price of milk.
Keep up with the latest on the milk price crisis