Profits Dripping Away For Dairy Farmers

Some 16 farmers are giving up on dairy production every week as production prices fall to as low as 28p per litre.
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Andrew Wright gets up at 5.30am every day to milk his herd of 170 cows.

He took over the farm in Cheshire from his parents twenty five years ago and had hoped to one day pass it on to his son.

But times are tough for dairy farmers. Milk prices are falling and for every pint produced there is no guarantee of a profit. Indeed, many farmers are already making a loss.

Unable to balance the books, 16 dairy farmers are giving up on milk production every week in England and Wales, according to the Tenant Farmers Association.

It’s a prospect Mr Wright is now having to face.

«If prices keep dropping as they are, in another 12 to 18 months’ time we will have to consider how the business carries on, or in what form the business carries on,» he says.

«I have a son who’s 12. He’s shown an interest in the farm. I don’t want to discourage that in any way but he’ll have to make his own mind up and if he sees that there isn’t the return there for his dad, he is probably going to look elsewhere for employment in the future.»

In April, farmers could get up to 35p per litre, but that’s dropped to around 28p. That’s less than the cost of producing milk, which is around 30p per litre.

Farmers say supermarket price wars are partly to blame for devaluing milk.

Some retailers sell milk at a loss and most have cut the cost of a four pint bottle over the last year. In some supermarkets it’s now sold for as little as 89p.

But supermarkets argue it’s their profits that take a hit when they cut the price to customers.

Andrew Opie from the British Retail Consortium said: «The fact a supermarket might sell four pints for a pound doesn’t impact on the farmer. They’ll be getting a guaranteed price through the dairy that they’ve agreed with the supermarket.

«So if a supermarket wants to invest in its own milk to sell it more affordable for consumers, that’s great for consumers.»

But a number of processors who buy from farms to sell to retailers have been cutting the price they pay to farmers, and further cuts will come in 2015.

Mr Wright says farmers wonder who is making a profit.

«It’s always the farmer at the bottom of the chain that gets told how much he’s getting for his milk,» he says.

«Maybe the processors should be opening their books if they’ve got nothing to hide.»

He fears that eventually savings may need to be made on feed and vaccinations but that is not a path he wants to go down unless he has to.

For now he’s just watching profits dripping away.

 
Source: SkyNews

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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