Dairy farmers go unpaid as milk prices drop

Thousands of dairy farmers will not be paid for milk today, after the UK's largest dairy company First Milk announced a crash in prices. 

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Black and white cows in a pasture

Thousands of dairy farmers will not be paid for milk today after the UK’s largest dairy company First Milk announced it was struggling financially following a crash in milk prices. 

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The business, which is a co-operative owned by dairy farmers, will delay payments by two weeks. First Milk blamed 2014’s ‘year of volatility that has never been seen before’ for their current financial crisis. 

Sir Jim Paice, chairman of First Milk, said: “The board are acutely aware of the difficulties this current extreme volatility is causing First Milk members and the UK dairy industry.”

“We don’t know how long this current market downturn will last, and we are aware that hundreds of UK dairy farmers are unlikely to find a home for their milk this spring.

“Our priority is to make the business as secure as possible in order that we can continue to process and market every litre of our members’ milk.”

Global milk prices fell by over 50% in 2014, partly due to good weather and more production in areas such as the US and New Zealand. Demand worldwide fell, particularly in China.

The National Farmers Union (NFU) said in December that the number of dairy farmers had dipped below 10,000 for the first time – a fall of 50% in a decade.

NFU president Meurig Raymond told BBC Radio 4 that: “We have seen the product devalued – liquid milk in particular is now cheaper than water. There are very few dairy farmers making any money, most are haemorrhaging money at this present time, particularly those [selling milk] at 20p a litre.”

Farmers are now calling for the supermarket ‘retail war’ over milk prices to desist after the price of four pints fell from £1.39 to less than £1, making it cheaper pint-for-pint than mineral water. David Handley, chairman of Farmers for Action, said the use of milk as a loss-leader to attract shoppers was turning the product into a “throwaway commodity”.

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Read a personal view of how falling milk prices affect farmers and their families.