Milk price rise of 50p inevitable warns leading Lancashire dairy farmer

Farmers across the region are facing huge increases in the running costs of their businesses and they say something’s got to give.

By Fiona Finch
Tuesday, 5th April 2022, 4:55 am

For the consumer that means price hikes for milk and dairy are inevitable in the weeks ahead, predicts a local industry spokesman.

Graham Young, Chairman of the NFU (National Farmers Union) North West Dairy Board, says while farmers are not price makers but price takers, there will have to be an increase in the prices charged for milk and dairy products.

He predicted that while consumers are now paying £1.15 to £1.20 for two litre packs of milk that price will have to rise to £1.60 or £1.70. There will also be a knock on rise in the cost of cheese and yoghurt.

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NW Dairy Board chairman Graham Young at his farm in Samlesbury Photo: Neil Cross

In his Board role he speaks for dairy farmers across Lancashire, Cumbria and Cheshire. He said all farmers are facing the same challenges of rising prices for raw materials. Citing his own experience at his farm at Samlesbury, near Preston, he said: “Currently input costs are just running away with themselves. Our electric contract runs out in November and it’s quadrupled in price.”

Graham continued: “Feed costs are up by 30 per cent. Diesel’s gone up 30 per cent this year. This is a time of year when we’re diesel hungry and do all the work in the fields ploughing etc. I don’t want to sound like a stuck record but at the moment it’s going to get quite difficult. Milk and beef prices are going to have to follow.”

He predicted it would cost four times more to grow next year’s silage crop than previously: “Fertiliser was £260 a ton, this year we’re paying £1,000 a ton.”

Noting that the problems are hitting at a time when there is not just a UK but a world shortage of milk he said industry experts were predicting eventual price rises of 50 per cent for milk and 30 per cent for butter and cheese.

Rising farming costs mean the cost of milk could rise and even double in price

But he is determined to remain optimistic about the future of the beleaguered industry. He said: “Farmers are going to keep farming, grass is going to keep growing. We’re going to keep trying to produce milk.”

At Sudells Farm at Alston, near Longridge, Nick Eccles, winner of the national Cream awards Young Dairy Farmer of The Year title in 2021, said: “All our input prices are rising ...everything is interlinked.”

He said farmers have another concern too, which could impact next winter: “One of the major things farmers are worried about and they can see coming is a bit of a food shortage.”

He added farmers are looking to the Government for reassurance about food security and becoming more self sufficient, with some farmers unable to afford the fertiliser needed to grow crops to help meet their demands for feed for next winter. The war in Ukraine meant there would be less wheat available too. He predicted some farmers would have to reduce their stock numbers.

National NFU Dairy Board Chair Michael Oakes said: “For most dairy farmers the cost of production is much higher than the price they are currently receiving for their milk ... We’re asking for fairness across the whole supply chain to manage these inflationary pressures and to ensure that farmers are being supported through these challenging times.”