Housewives and consumers have long enjoyed falling milk prices in the supermarkets over the last few years, but few of us have realised the devastating effect this has had on the livelihoods of our dairy farmers. And with the latest cut dairies have announced of up to 2p a litre, for the price they will pay to the farmers, farmers are now threatening to withhold milk supplies and stage protests. So far three national dairies have recently said they are slashing the so-called farm gate price for milk and this is after a 2p cut back in June 2012 which also reduced the amount the farmers were getting. President of the National Farmers’ Union Peter Kendall told Sky News, “The real problem for us is that when we see supermarkets, and Tesco and Sainsbury’s are two examples that have a price tracking formula, they’re paying farmers approximately 30p. These farmers from August 1 could be on as little as 24p.” He added: “We will draw attention to that date of August 1 and say you must rescind those price cuts. Farmers will probably stand outside shops and say these guys are not looking after farmers.”
The problem is also with the type of contracts the farmers have with the dairies. Typically they are 12 month contracts and yet the dairies can give less than 5 days notice if they want to cut prices. Mr Kendall said, “Dairy Crest gave the farmers four days’ notice they were going to cut the price but because of the contacts we currently have operating the farmer couldn’t leave or sever that term for another year. That is a complete imbalance.” He added, “Our market has been failing to work for the dairy farmers for far too long.” Here in the UK we are the third largest milk producer, behind Germany and France, producing around 13.5bn litres of milk annually. However, with supermarkets undercutting each other all the time, it is the farmer who consistently is bearing the brunt of these prices wars and losing out. This means that what with low bulk cream prices and higher input costs, now British farmers are being paid much less than their European counterparts.
In April of this year, the average farm gate price – which is the price paid to the farmer – was 27.91p per litre according to the Department for Environment, Food and Rural Affairs (DEFRA). This is 3% less than the average price in the EU and roughly 4% less than what the farmers were being paid at the beginning of this year. Mr Kendall said that the industry needed to do more to look after the interests of those at the bottom of the chain and it appears that public opinion is with him with comments such as those below taking a positive stance with the famers:
“The poor farmers have been loosing out for a long time now. My husband used to work on a farm some time ago and even then they was not paid much for the milk. I dont blame the farmers comeing out for their rights. the cattle feed is an enormous price, they dont eat just grass. I wish the farmers a lot of luck for their fight and I hope they win.”
“I can buy milk from my local shop for 1-60 for 4 pints. I can also buy the same from Iceland supermarket for a pound. Its farely obvious that the supermarkets are squeezing the small man. We limit the number of reactions an individual user can submit over a given period for quality reasons.”
“It was only 28.98p a litre in January now its 26.99p and a cow on full production gives 40 litres a day so thats 80p a day x 7 days a week thats £5.60 a week per cow take off another 2p a litre and thats £11.20 the average size of a dairy herd is 100 cows so thats £1,120.00 a week down since January. Until I did the sums I was going to say whats the fuss for a few pence but now I’m with the farmers.”
“How come people like Arla who distribute milk are able to dictate the price they pay. It is like me walking into a shop and telling the shopkeeper I am going to cut the price of a newspaper by 10p. Can you imagine the reply? I hope the farmers hold out and tell these greedy hogs to jog on. Farmers are already struggling and many have gone to the wall through greedy supermarkets and price cutting wars. If our farmers go under then we can look forward to cheap imports from outer Mongolia and the like.We limit the number of reactions an individual user can submit over a given period for quality reasons. You have currently reached that limit. Please try recommending this comment again later.”
“why isn’t the farmers union and the government agency for rural affairs doing anything to help the farmers ? what can the shopper do to help? after all we have a vested interest in making sure we continue to get the best products that the British farmer can give us at a price that doesn’t destitute the farmer.surely milk is at present great value for money and if 1p more on a pint can keep farmers in business it is a small price to pay,as long as it is ring fenced to go to the farmer.”
It seems that UK opinion is pay the farmers a decent price for their milk and let the supermarkets take some of the brunt of a price war, they can afford it!