More retailers slash milk prices as market eases

More retailers have followed Tesco and Sainsbury’s and slashed the price of milk on their supermarket shelves, while farmgate prices continue to fall.

Aldi and Lidl announced on Friday 14 April they were reducing the price of their four-pint own-branded milk from £1.65 to £1.55 – matching price drops by Tesco and Sainsbury’s announced earlier last week.

With commodity prices in dairy easing, Asda said later on Friday it had taken action to match those price cuts across its stores and online “to support customers through the cost-of-living crisis”.

See also: Dairy farmers urged to revise budgets as milk prices fall

Kris Comerford, Asda’s chief commercial officer, said: “Our latest income tracker shows over 11 million families in the UK don’t have enough income to cover their weekly expenses, which is why we have invested to protect our customers throughout the cost-of-living crisis – and have taken swift action to reduce the price of milk as commodity prices have eased.”

Morrisons and M&S have also slashed the price of four-pint containers of milk to £1.55. But a spokeswoman for M&S said the move would not affect the price it paid to its milk suppliers, adding: “We believe this month we are paying the highest farmgate price for milk in the market at 52.44p/litre.”

Waitrose said it had dropped the price of four pints of milk to £1.65 from £1.70 and two pints from £1.35 to £1.30. A spokesperson said: “We continue to regularly review our prices and are committed to offering great value for our customers. Waitrose milk is the only free range milk on the market with high welfare values.” 

John Allen, managing partner at dairy consultancy Kite Consulting, said the breakeven price for producing milk was around 42-43p/litre.

“We have got farmgate milk prices now generally below 40p/litre and some even below 35p/litre,” he added. “The knock-on impact will mean inevitably supply will be affected at some stage, possibly later this year.”

To secure a long-term supply of milk, Mr Allen said retailers and the food service industry must recognise what their suppliers were doing for sustainability and animal welfare, and reflect this in the prices paid to farmers.

NFU Dairy Board chairman Michael Oakes said falling farmgate milk prices were damaging the financial viability of dairy farms and the mental health of dairy farmers.

“Dairy farms have had a tough winter. Some have already run out of forage, they have had to turn their cows out when conditions have not been ideal, and the milk price has dropped up to 12p/litre in under three months,” he said.

“It’s quite difficult for a lot of people to stay positive and keep morale up at the moment.”