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What price milk?

What price milk?

Would paying more for our milk solve today's milk price crisis? Countryfile investigates.

A new survey commissioned by DairyCo suggests the number of consumers who say they'd pay more for their milk has gone up to 80% – so long as dairy farmers get the additional money. And 18% said they'd be happy to pay up to another 20p a litre. But, asks Countryfile's Tom Heap, is this the answer to today's milk price crisis?

In 2014, the number of dairy farmers in England and Wales dropped below 10,000 for the first time. Every week, more farmers leave the industry. For many, it's all down to the price we pay for a pint. It's one of life's essentials, yet milk frequently costs less than water to buy. Dairy farmers generally feel this pricing strategy de-values milk.

But even if we did pay more for our milk, there's no guarantee this would have a positive effect on the market. You see, the price that supermarkets charge us isn't the same as the price they pay for milk. They choose to discount it to stay competitive. And they pay dairy farmers a set price, no matter what they sell it for. Only a quarter of all milk produced in GB is bought using direct contracts with supermarkets.   

Dairy farmers are affected by the international price of milk too. They sell whole milk that's then processed; half stays as liquid (fresh), while the other half goes into yoghurt, cream, butter and cheese, sold around the world. And global market prices have also dropped dramatically.

So what's the solution? Richard King, a business analyst, believes that, if all supermarkets paid producers more than the cost of production, this would give UK dairy farmers some certainty on milk pricing. And, inspired by the bottled water market, some farmers are 'branding' their milk enhancing its perceived value so they can charge a little bit more for it.

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