A fair price for milk

We believe that farmers should get a fair price for their milk that reflects the true costs of production.

It is not clear why there should be such a difference between what farmers receive when the milk leaves the farm gate and the price that it is sold for on the supermarket shelf and doorstep.

Figures from the Dairy Co (formerly the Milk Development Council) show that over the last four years an average of 78 producers per month have quit dairy production in England. Some farming organisations have serious concerns that Britain may need to import milk in the future. DairyCo have said that milk production has fallen over the last 5 years and is now at its lowest level in the UK since the early 1970s.

Prices paid to farmers for their milk increased substantially in 2007/08 but have now started to fall back again below the cost of production.

CPRE welcomes moves to ensure there is transparency in the pricing and supply of milk. We believe the price a producer receives for their product should reflect the cost of production and the quality of that product. Environmentally sustainable production should be rewarded by the sales of their produce to consumers and support from agri-environment schemes.

Ideally, consumers should try to buy milk from local farmers, either directly or at local shops or by using a milkman to keep the supply chain short and to sustain the local food economy. Our report the Real Choice highlighted the importance of local food networks and the complex interactions between producers, processors and retailers.

We’re concerned about the effects on the environment of a decline in dairy production. As our report Living Landscapes revealed the countryside is heavily reliant on farmers to manage our landscapes and some habitats rely on a mix of sheep and cattle grazing, sometimes extensively (i.e. over large areas of land) to maintain the diversity of animal and plant species that inhabit them).

As the number of dairy farms declines the sizes of herds is likely to increase, as the remaining farmers try to achieve greater economies of scale. Analysis of milk production data for the year 2007/8 shows the production gap is growing between larger and smaller producers, with just a quarter of Britain’s dairy farmers producing over half of the year’s milk supply. 26 per cent of farmers produced over one million litres of milk, accounting for 57% of the total in 2007/8. This is a 5% increase on the 2004/5 milk year, where 21% of farmers produced over one million litres, 48% of the total milk production.

This could mean higher concentrations of animals on the best grazing land. And that could lead to damage to soil and water quality. This could be due to a number of reasons. More chemical fertiliser might be needed to make grass grow more vigorously in fields used for grazing and for silage making. There could be increased soil erosion caused by the trampling of the grass by cattle’s hooves (a process known as ‘poaching’). Growing maize to feed cattle, also means more soil is exposed to erosion by wind and rain. There are pollution risks from land containing higher levels of nutrients resulting from intensively fertilised fields. Finally, this intensification of production also means larger buildings are needed in the countryside to house the animals; this could damage the character of some our landscapes.

CPRE believes agri-environment schemes must be properly funded so that farmers do not have to rely on intensified production practices which can damage the character of our landscapes, wildlife habitats.