To think the retailers can't have it both ways - Milk Prices

[DadfromUncle]

Extensively reported today is the PR parrot line that "retail prices have nothing to do with what is paid to farmers" - and also that retailers pay a fair price. So which is it?

Once they have driven all the farmers out of business I assume we'll air-freight all our milk from Russia or something?

I think there could be an element of supply and demand with milk, but only in that if UK milk is significantly more expensive than cheap foreign milk, at some point, the big retailers will source their milk from those suppliers.

However, I don't think it's feasible to import foreign fresh liquid milk - it would just go off before it got here. But longer life products like cheese and UHT milk may be sourced overseas?

But I don't think there is much of a supply and demand issue with milk on a household level - surely most people just buy the amount of milk that they use? I suppose there might be a minority who try to cut consumption for cost/health/ethical reasons. Average consumption levels would probably only change noticably if the price rose significantly - doubled or more - after all, milk is historically very cheap.

You can currently buy 4 pints for less than a pound and I think it might have cost more than that even 10 or 20 years ago.

Also, what about milk that's used in food manufacturing? What proportion of dairy farmers output goes into retail as milk?

I would have thought that the bulk would go to be dried or whatever. What sort of prices do they get for that, or are those markets supplied by imports? What about formula for eg?

From this Sainsbury's ad: Link

Price paid to farmer for 4 pts:
M&S 78p
Tesco 73p
Sainsbury's 72p
-Cost of production 68p-
Morrison's/Asda 56p
Lidl/Aldi/Iceland 56-59p
Waitrose No comment

I paid 45p in sainsburys for a pint of milk this week. We dont use an awful lot of milk in this house as only my dd uses it on cerea,. Dh is dairy free. I would happily pay more for my pint if I could guarantee that the farmers are getting it. Although I am not sure we can trust most of the big supermarkets to give it to them!!
It has opened my eyes though to make an active effort to find out where my milk comes from, I wasnt aware that there was a possibility that my milk could be coming from abroad. If this was the case, I would love the supermarkets to go british, like morrisons did with pork I believe.
I am hardly a huge milk buyer, but I would hope that even one pint of milk would make a bit of a difference. But surely people who are on budgets dont have the money to be picky, some people need to buy the cheapest to feed their family. I too would like to know more about the milk going into food production, cheeses and yogurts. Where it comes from and costs there.
To me now, I think I will definitely be looking more at milk, and having better standards, like I do with free range eggs, although the price there seems to be dropping and dropping too.

Milk pricing is a bit odd IMHO. 45p for one pint, 70 or 80 p for 2 pints and then you can get 4 pints from 89 p upwards. Or in the co-op one 4 pint is about £1.50 but you can get 2 for £2. I wonder if they way it is sold effects the price the farmer gets?

I'm married to a Farmer - He was a dairy farmer, with a herd of 150 cows.

We packed in cows in December 2010 because it cost more per litre to produce the milk than we were paid for it. (we were paid 21p/litre, cost of production was 23p/litre and we were on a good Dairy Crest contract).

Wheat and Barley prices have dropped through the floor, Lamb prices are the lowest they've been for years at £45/head, and yet farmers input costs are rising every day because all costs are passed down the chain. We reckon we'll be lucky to break even this year. It's only because we've been lucky enough to have family investment into the farm to keep us going, that we are still standing and are mostly up to date with our bills.

The situation is shocking and getting worse. Farming has the highest depression and suicide rate of any industry in the UK. Most "average" farmers are in a negative bank balance, with loans and debs rising. Yet they still keep farming. You ask Why? Because it's in their blood and it's what they do. They keep on providing food for ungrateful consumers & supermarkets who want cheaper food, with no idea of how it is produced.
Yes, I am bitter at seeing my husband work his arse off in all weathers, trying to provide for his family with no respite. The lack of farming income has a knock on far reaching effect.

Consider this;

Our bank balance is down, due to the drop in farm gate prices. That meant I had delay paying for my sheep dog to be trained. In turn, that meant that the sheep dog trainer was late paying their feed bill, which meant that in turn, the feed supplier couldn't pay one of his bills. Because the feed supplier couldn't pay his daughters piano lesson bill on time (because he was waiting for a cheque to clear), it had a knock on effect on the finances of the piano teacher - someone 230 miles away from our farm and not connected to farming.

Things have got to improve. Farmers need to be paid more, and they need fair prices.

I agree with you QuietTiger, and Id like to know what choices I can make as a consumer to make any difference. Bearing in mind that I live in the middle of a city so buying direct isn't possible.

Changes I've made to my food shopping in the past based on my awareness being raised about various things include:

• buying free range eggs and chicken
• buying only British lamb, beef and pork
• buying only fairtrade bananas, coffee, tea
• buying only outdoor reared pork

Only tiny things and I don't kid myself it makes much difference if any. but it does show that a fairly lazy and financially precarious consumer like myself will make purchasing decisions based on factors other than price if given the information and the opportunity.

For eg, if there was a milk brand called something like "The Scottish Fair Pint" which promised to pay farmers 30% more and cost me, say, 50% more I'd definitely buy it.

That's interesting Maid. I pay 46p per pint, delivered. I think the farmer gets about 32p and the milkman gets the rest.

Quiet's take is by no means unique. We used to rent a farm cottage on a dairy farm. Our farmer landlord told us that in 1990 he'd cleared 40k profit. In 2000 (the year we lived there) he scraped £5k profit. In September 2000 he poured away 3 days worth of milk during the fuel strike, because no one could pick it up. In the Spring of the following year his herd was put down due to Foot and Mouth. A few years after that he lost the income from hosting the New Year hunt. At 49 he started again - but has diversified into rare breed pigs, equine livery and letting out his land for sheep grazing, grass track racing and to a riding school. But no more cows, he tells me there's no money in dairy.

A huge part of the problem is the milk used in food manufacture, this can come from anywhere and frequently does. Therefore if a farmer hasn't got a contract with one of the "good" supermarkets, but is selling to one of the big processors, who in turn sells on to cheese/yogurt makers they are very vulnerable to the global market price, which at the moment can be as low as 10.5p/litre.

To put that into context, my nephew milks 1200 cows, split over 3 farms. He must be as about as efficient as you can get on a traditional model (cows still go out into the fields in the summer etc) but it costs him 14.5p to produce one litre. Smaller farmers, of the type we'd all like to see with Daisy, Bluebell and Buttercup grazing happily by the house stand no chance. Dh was recently at a dispersal sale and the farmer was in tears at selling his "girls" but his contract had not been renewed and so there was not market for the milk as no other processor would take him on, and the cows still had to be milked.

I'm now going to try (not sure how) to make sure that any dairy products I buy are made with UK milk.

QuietTiger we aren't all ungrateful :) - as a minimum I'd like farmers to make a decent living. Since my local butcher closed I have struggled to find a good local source for meat and dairy. I said to my then wife 10 years ago as we walked into Tesco under a banner that bragged about 100s of prices lower than last year that I didn't want supermarkets to shaft the farmers and other suppliers, and I do my best, but it's gettinb harder and harder to find places to shop that do the decent thing. I really do sympathise - and I have read that statistic about suicide. I know it's truly a vocation, not just a case where you could pop off and find a different job (although I know many small farmers do have to do another job to stay afloat)

Maidofstars Thanks for your 12.03 post. Just the info I was looking for re which shops pay a fair price and which don't.