Milk prices from 2005
This note describes how dairy farmers faced low prices for several years but saw some improvement in 2007 and 2008.
• The dairy industry has suffered from low milk prices for several years. In November 2010, the President of the NFU said that the UK dairy industry risked becoming unsustainable, unless action was taken. However, an EU report in November 2010 was optimistic about prospects for the EU dairy industry over the next ten years.
• Further price cuts in July 2012 will leave many farmers losing money on each pint of milk sold.
• Many dairy farmers have left the industry, but those who remain have increased their herds and productivity so that the implications for the longer-term level of output remain unclear.
• Many farmers blame their low prices on the way that four large supermarkets dominate the grocery market.
• In 2009, several EU agriculture ministers deplored the unprofitability of the dairy industry and pressed the European Commission to take action. The EU Dairy Fund was introduced in 2010.
• Another note covers statistics; Dairy Industry: Statistics (SN/SG/2721). Further information about dairy industry statistics is available from Defra webpage: UK milk prices and composition of milk and DairyCo, a division of the Agriculture and Horticulture Development Board: Dairy Statistics: an Insider's Guide
• Another note – The Groceries Code Adjudicator (SN6124) covers the proposed introduction of a grocery ombudsman.
• Two major factors affecting dairy farmers are covered in separate notes Badger Culling (SN/SC/5873); Nitrate Vulnerable Zones (SN/SC/4552).