Milk price drops not so good for farmers

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In these difficult times, one of the few pieces of good news for the consumer has been super market price wars.

Reasonable weather conditions this year and the rise of Aldi and Lidl has meant that the other supermarkets have had to cut prices and increase promotions.

Whilst this is good news for shoppers, spare a thought for farmers.

To take the example of the local dairy farmer, in the last four months the price he has received for his milk has dropped by 25 per cent.

The supermarkets are using his products as a loss leader – four pints of milk for 89p. Supermarkets can try to make up that profit on other items and he squeeze their suppliers to get to that price.

Contrast that with the farmer. Usually contracted to one buyer, with limited competition (and anyway the buyers are under pressure from their customers (supermarkets), the farmer cannot suddenly cut production or move resources elsewhere.

Farming is not just a job, it can be a great way of life, but also isolated, particularly when things aren’t going well.

As a well known agricultural law practice we are seeing clients contacting us to see what they can do to activate hardship clauses in their supply contract.

If you are a farmer reading this, the most important thing is not to feel isolated, if you do not have anyone to talk to there are non-profit organisations that can help such as the Arthur Rank Centre or the Farming Community Network.

For the rest of us, consider that our extremely cheap milk comes at a cost.

Local farms are critical to our communities – economically, environmentally (the landscape and food miles) and for food security and quality.

An extra 10p a litre would transform the position for farmers but would make very little difference to (most) household budgets. Let’s support our local farmers and buy local where we can.