The shock of low milk prices

Every few weeks I get an email in my inbox, detailing the amount of money farmers will be paid for their milk from various processors. The most recent one was from Müller Wiseman here in the UK: “Müller UK & Ireland is to offer a milk price to farmer suppliers of 22.35ppl (€0.316) from 7 September, 2015. The reduction of 0.8ppl reflects a continuing softening in the market value of farm-gate milk due to very high levels of supply from farms in the UK, coupled with weak global demand. Analysts suggest that dairy farmers in Britain have increased the supply of milk by 1.6 billion litres in the last 12 months compared with the same period two years ago.” It is astonishing that the price of milk could be so low, but oversupply has wreaked havoc on dairy farmers worldwide and Europe, with its higher costs, is certainly feeling the strain. This is after Arla, First Milk and Dairy Crest having made further cuts themselves. Farmers are getting 25 per cent less than they were a year ago, according to the Guardian newspaper.

No wonder the farmers are doing things like buying milk at a supermarket and handing it out to charities. In effect, that is what they’re doing anyway. But who is to blame? The supermarkets shrug their shoulders while they give with one hand (a bit higher price on liquid milk), yet take away with another (lower prices for milk going into other dairy products). Processors themselves are squeezed in the middle – unable to offer more because they won’t be able to turn any sort of profit. Consumers say it’s a pity and yet still go for the 89 pence (€1.25) per four-pint container. I remember being shocked when it was 99 pence. I didn’t think it could go much lower than that and have dairy farmers still working.

They can’t, really. When this is all over and we’re drinking and having to use imported milk and complaining about the price, we will have nobody to blame but ourselves. Very sad.