Britain's dairy farmers are facing a bleak economic reality, with many struggling to stay afloat as milk prices plummet at an alarming rate. For Paul Tompkins, the daily cost of running his 600-acre farm is £1,800, even before he starts work. The problem lies in the fact that he can produce milk for just 40p per litre from his herd of 500 cows, but is only being paid 29p per litre by his milk processor.
This situation is not unique to Tompkins; the average cost of production across Britain is equivalent to national average. Dairy farmers are doing everything they can to reduce costs and stay competitive, with many opting for cost-of-production-aligned retail contracts or joining cooperatives in an effort to maintain profitability.
However, it seems that even these efforts may not be enough to save the industry from further decline. Milk prices have been falling at a rate of 20p per litre over the past few months, and experts warn that farmers could soon be losing money on their milk. If farmgate milk prices remain at current levels, Tompkins' farm is expected to make a loss of £660,000 this year.
The root cause of the problem lies in global oversupply of milk, which has left Britain's dairy industry reeling. The UK processing industry is dominated by three main players – Arla, Müller and First Milk – but even they are struggling to cope with the quantity of milk being produced.
Farmers have tried various strategies to reduce production, including buying animal feed for their herds instead of grazing, which led to record-breaking volumes being produced. However, this approach has ultimately resulted in processors throwing away excess milk, exacerbating the problem.
The situation is not just affecting dairy farmers; it also has implications for consumers. Food price inflation has been persistently high, and many shoppers are waiting for wholesale prices to fall before seeing a decrease in their shopping baskets. Retail prices for butter and cheddar cheese are expected to take several months to drop, while coffee lovers will have to wait even longer.
Industry experts warn that the latest milk price shock could lead to more dairy farmers leaving the industry altogether. Mike Houghton, a farm consultant, predicts that up to 10% of producers – or around 700 farmers – could quit for good due to the unsustainable nature of their business.
This situation is not unique to Tompkins; the average cost of production across Britain is equivalent to national average. Dairy farmers are doing everything they can to reduce costs and stay competitive, with many opting for cost-of-production-aligned retail contracts or joining cooperatives in an effort to maintain profitability.
However, it seems that even these efforts may not be enough to save the industry from further decline. Milk prices have been falling at a rate of 20p per litre over the past few months, and experts warn that farmers could soon be losing money on their milk. If farmgate milk prices remain at current levels, Tompkins' farm is expected to make a loss of £660,000 this year.
The root cause of the problem lies in global oversupply of milk, which has left Britain's dairy industry reeling. The UK processing industry is dominated by three main players – Arla, Müller and First Milk – but even they are struggling to cope with the quantity of milk being produced.
Farmers have tried various strategies to reduce production, including buying animal feed for their herds instead of grazing, which led to record-breaking volumes being produced. However, this approach has ultimately resulted in processors throwing away excess milk, exacerbating the problem.
The situation is not just affecting dairy farmers; it also has implications for consumers. Food price inflation has been persistently high, and many shoppers are waiting for wholesale prices to fall before seeing a decrease in their shopping baskets. Retail prices for butter and cheddar cheese are expected to take several months to drop, while coffee lovers will have to wait even longer.
Industry experts warn that the latest milk price shock could lead to more dairy farmers leaving the industry altogether. Mike Houghton, a farm consultant, predicts that up to 10% of producers – or around 700 farmers – could quit for good due to the unsustainable nature of their business.
! Milk prices are like, literally plummeting and it's killing dairy farmers in UK 
. £1,800 daily cost just to produce milk at 40p per litre? That's insane 
. And experts think even cost-cutting efforts won't save the industry from further decline 
. Global oversupply is the main culprit 
. It's not just farmers who are affected, but also consumers 
. Food prices are already high and retail prices for dairy products are going to be stuck in the mud 
. Maybe it's time for the UK to rethink its milk production strategy? 
. I get that global oversupply is a big factor, but it feels like the industry is just trying to break even 
.
... I mean, £1,800 just to keep the farm going? That's crazy! The prices are dropping like crazy and they're still being paid peanuts (29p per litre) . It's like, what's the point of even trying? They're basically working for free 
. And it's not just the farmers, it's also the consumers who are getting screwed... I mean, we're already seeing food price inflation through the roof 
. It's all about supply and demand, I guess, but it feels like this industry is just going to collapse under its own weight 
.
They're working so hard just to make ends meet, but it feels like they're drowning in debt 
️, you know, when milk was just a simple staple & not some fancy-pants commodity 
.
. I know it sounds old-fashioned, but isn't farming just like... the backbone of society or something? 
.
. And now experts say they might even be losing money on their milk 
. It's not just the farmers though, it affects consumers too 
. I mean, can't we all just get along and find a solution that works for everyone? 
. And the fact that processors are just throwing away excess milk doesn't help - what's the point of having all this milk if nobody's buying it? 
. And now experts are saying 700+ farmers might leave the industry? That's just devastating news... what's next?
or even tho leave the industry altogether.