Q&A: Milk prices row and how the system works

UK dairy farmers are being forced out of business because of the low price of milk, industry leaders warn. In protest at their plight, farmers have been blockading milk distribution centres and even bringing cattle into supermarkets. What is the row over milk and who does it involve? 

No rest for the wicked. Photo: BBC
No rest for the wicked. Photo: BBC

Dairy farmers say they are in “crisis” because of the continuing fall in the price of milk. Put simply, it is costing farmers more money to produce milk than the amount they receive when they sell it. Figures released by the Department of Food and Rural Affairs (Defra) for June 2015 put the average farm-gate price – which is the amount of cash farmers receive – at 23.66 pence per litre (ppl), the lowest for five years and down 25% in the last 12 months. However, farmers estimate that it costs between 30 and 32p to produce a litre of milk.

How are supermarkets involved?

graphic_bbc

Graphic: Approximate costs breakdown of a 2 litre bottle of milk
The National Farmers’ Union (NFU) argues that a supermarket price war, which has seen a 2.3-litre bottle of milk sell for 88p, has devalued the product in the eyes of the public, “purely to get customers through the door”. Read more.

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