In the Torygraph tonight. Cannot link as it needs a subscription!
ByTom Rees3 April 2022 • 8:30pm
Dairy farmers have held crisis talks in Brussels over soaring costs and supply chain disruption, as the industry warns the price of a pint will jump by 50pc.
Rocketing costs from feed, fertiliser and fuel have stoked fears in the industry of a surge in milk prices not seen in decades.
The cost of four pints of milk will jump from around £1.15 to between £1.60 and £1.70, an increase of up to 50pc, according to Kite Consulting, the UK’s leading adviser to dairy farmers.
Michael Oakes, the dairy board chair of the National Farmers’ Union, agreed that milk prices will likely rise by as much as 50pc.
John Allen at Kite said a 30-year period of low milk price rises is “coming to an end now” as costs surge on multiple fronts. He expects a typical pack of butter to rise from £1.55 to more than £2.
He said: “What is of concern at present is processors are getting inflationary costs as well and also we are short of milk around the world.”
The dairy industry is likely to pass on higher costs from the Ukraine crisis disrupting fuel, fertiliser and feed prices, with both farmers and processors squeezed CREDIT: Danny Lawsom /PA
Dairy industry bosses from the UK and elsewhere in Europe flew into Brussels at the end of last week with talks led by Eucolait, the continent’s leading dairy industry group. Dairy processors, which act as a link between farmers and shops, are said to be deeply concerned about soaring costs both at farm level and further up the supply chain, as the war in Ukraine lifts key input costs.
One participant at the meeting said bosses were looking at best and worst case scenarios facing dairy supply and prices after a global pullback in milk production.
“They were all talking about how we are going to get the milk supply to turn back on,” said another.
UK dairy industry bosses have raised concerns over their costs to the Government, but officials at the Department for Environment, Food and Rural Affairs (Defra) are said to be merely in “listening mode”.
The dairy industry is likely to pass on higher costs from the Ukraine crisis disrupting fuel, fertiliser and feed prices, with both farmers and processors squeezed.
Andrew Kuyk, director general of the Provision Trade Federation, said: “Everything is going in the wrong direction at the same time.
“The direction of travel is bad. The strength of the price increases is stronger than most people will have known in recent times because this is all pretty unprecedented.”
Mr Oakes, who is also a farmer, said: “I was paying about £7,000 for an artic [articulated lorry] load of fertiliser, and this year it’s £28,000. It would have been a little bit less before Ukraine happened, but it made another big jump because we’d already seen higher gas prices, which have implications for fertiliser costs.
“It hasn’t been a particularly good time for dairy farms over the last few years. Cash flows have been quite tight.”
He added that feed costs have risen 60pc.
Price of a pint of milk to surge by 50pc, industry warns
Dairy bosses from the UK and Europe flew into Brussels last week for crisis talks over rocketing feed, fertiliser and fuel costsByTom Rees3 April 2022 • 8:30pm
Dairy farmers have held crisis talks in Brussels over soaring costs and supply chain disruption, as the industry warns the price of a pint will jump by 50pc.
Rocketing costs from feed, fertiliser and fuel have stoked fears in the industry of a surge in milk prices not seen in decades.
The cost of four pints of milk will jump from around £1.15 to between £1.60 and £1.70, an increase of up to 50pc, according to Kite Consulting, the UK’s leading adviser to dairy farmers.
Michael Oakes, the dairy board chair of the National Farmers’ Union, agreed that milk prices will likely rise by as much as 50pc.
John Allen at Kite said a 30-year period of low milk price rises is “coming to an end now” as costs surge on multiple fronts. He expects a typical pack of butter to rise from £1.55 to more than £2.
He said: “What is of concern at present is processors are getting inflationary costs as well and also we are short of milk around the world.”
The dairy industry is likely to pass on higher costs from the Ukraine crisis disrupting fuel, fertiliser and feed prices, with both farmers and processors squeezed CREDIT: Danny Lawsom /PA
Dairy industry bosses from the UK and elsewhere in Europe flew into Brussels at the end of last week with talks led by Eucolait, the continent’s leading dairy industry group. Dairy processors, which act as a link between farmers and shops, are said to be deeply concerned about soaring costs both at farm level and further up the supply chain, as the war in Ukraine lifts key input costs.
One participant at the meeting said bosses were looking at best and worst case scenarios facing dairy supply and prices after a global pullback in milk production.
“They were all talking about how we are going to get the milk supply to turn back on,” said another.
UK dairy industry bosses have raised concerns over their costs to the Government, but officials at the Department for Environment, Food and Rural Affairs (Defra) are said to be merely in “listening mode”.
The dairy industry is likely to pass on higher costs from the Ukraine crisis disrupting fuel, fertiliser and feed prices, with both farmers and processors squeezed.
Andrew Kuyk, director general of the Provision Trade Federation, said: “Everything is going in the wrong direction at the same time.
“The direction of travel is bad. The strength of the price increases is stronger than most people will have known in recent times because this is all pretty unprecedented.”
Mr Oakes, who is also a farmer, said: “I was paying about £7,000 for an artic [articulated lorry] load of fertiliser, and this year it’s £28,000. It would have been a little bit less before Ukraine happened, but it made another big jump because we’d already seen higher gas prices, which have implications for fertiliser costs.
“It hasn’t been a particularly good time for dairy farms over the last few years. Cash flows have been quite tight.”
He added that feed costs have risen 60pc.
