March 9, 2023
UK dairy farmers set to face further price cuts in March
The UK Agriculture and Horticulture Development Board's (AHDB) milk price changes report showed that dairy farmers in the country will experience generally larger price cuts in March than those announced for February as wholesale markets continue to decline, Foodbev reported.
The UK government said that the wholesale milk price from Guernsey Dairy will increase by 12.6% starting on March 12. The increase will lessen the milk processor's operating deficit and compensate farmers for their increased costs.
The wholesale price, which is what the company charges milk distributors, was last modified in January 2022. Despite the rise in wholesale prices, Guernsey Dairy still anticipates a loss in trading in 2023 as it continues to deal with rising inflationary costs for energy, packaging, consumables, and raw materials since Brexit and Russia's invasion of Ukraine.
Stuart Falla, chairman of the Guernsey Dairy management board, said that recent increases in milk prices are due to a decrease in the financial assistance that the States of Guernsey gives to farmers.
Falla said this results in farmers having to rely more on milk income, and that is being passed on to consumers through the retail price, which they have seen significantly increase in recent years.
Farmers will see a 10% increase in the price they receive for their milk as part of the increase Guernsey Dairy is implementing to reflect higher production costs in 2021 and 2022.
According to AHDB, the majority of the March price reductions in the UK were greater than 2 pence per litre and ranged from 0.5 pence per litre to 7 pence per litre.
Price reductions of between 3 and 4 pence per litre have been announced by Crediton Dairies, Freshways, Grahams, Müller, and Paynes Dairies.
Given the significant increases in farm costs over the last year, Jersey Dairy announced at the start of the year that its wholesale price would rise by 15 pence per litre. The dairy producer also cited supply chain issues, market volatility, and increased costs at Jersey Dairy and on Jersey dairy farms as being caused by the conflict in Ukraine, Brexit, and COVID-19 lockdowns in China.
- Foodbev
