March 4, 2008

UK dairy farmers fewer by 6.5 percent each year

The UK dairy industry has been shrinking since 2000, with around 11 percent of the national herd disappearing in the last five years, and farmer numbers reducing by 6.5 percent every year.

Industry players said dairy farmers in the UK lose an average of GBP4.7 (US$9.33) on every litre of milk they produce, giving the average dairy farm an annual loss of GBP37,600 (US$75,000).

First Milk, a farmer-owned dairy business that supplies more than 1.8 billion litres of milk a year, reported that the average price for a litre of milk over the year to March 31 2007 was GBP17.5 (US$35) against the cost of GBP22 (US$44) per litre.

The GBP4.7 (US$9.33) loss multiplied by the 800,000 litres that the average farm produces each year equates to GBP37,600.

Peter Humphreys, chief executive of First Milk, said the industry is gravely threatened and called for the introduction of a new formula to calculate a "consistently fair price" for milk.

The formula, according to the group, 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.

First Milk proposes that farmers should receive GBP29.6 (US$59) a litre for their milk this year.