Figures from UK’s First Milk, that supplies more than 1.8bn litres of milk a year, shows that the average price paid to a farmer for a litre of milk over the year to 31 March 2007 was £0.175 (€0.22) despite the cost of producing this milk being £0.22 (€0.287).

The breakdown of the cost of milk is based on a detailed analysis of a representative sample of dairy farms across England, Scotland and Wales. First Milk is calling for the introduction of a new formula to calculate a “consistently fair price” for milk. The formula should take into account rising production costs, labour costs on the farm and should include a profit margin so that farmers can reinvest in their businesses. It says that farmers should be paid ‚£0.296 (€0.38) a litre for their milk this year.

The report – called The Real Price of Milk – details the rising costs that have been absorbed by farmers in recent years, including animal feed, fertiliser and fuel. These rising costs were equivalent to an extra £36,000 (€47,039) a year since 2006.