THE PRICE OF A PINT?

When considering the price of a pint, and I am talking milk here, there are a few things we should all know. One litre carton of full-fat, non-organic milk can cost between 70-80p. From this a farmer will get between 21p and 28p. Production costs come in at around 28p. In the last 10 years two thirds of dairy farmers in England and Wales have gone out of business, and it has been estimated that one dairy farmer leaves the industry every day.

Historically the answer to low milk prices or a surplus was to turn excess milk into other dairy products, with dairies producing other valuable products like butter, cream, cheese and yoghurt's. Milk aside, diary products are big business. A 25 pence litre of milk may end up as something that sells for 15 times as much, people pay good money for ‘health yogurt’ – which with the addition of bacteria, flavouring and a marketing campaign produce healthy profits for the companies that produce them.

Some 40 per cent of our yogurt is made in France and Belgium, in 2009 more than 40 per cent of all Cheddar sold in the UK was produced abroad. It’s not just yogurt and cheese; it’s a similar story with butter. Only one of the most popular supermarket brands [Country Life] is actually from UK milk. The bulk of our butter comes from Denmark and Ireland, and this is despite tha fact that farm gate prices for milk remain consistently higher in Europe than here in the UK.

We (in the UK) when compared with 10 years ago now import nearly half our butter from abroad, cheese imports are also up, some 60 percent over the last ten years. In the UK we are importing those products that have added-value and are export the low-value milk products which are then turned into butter, yogurt, etc and sold back to us. This is madness; this is what happens in the Third World, where countries export their raw commodities cheaply and then have little choice but to buy back the manufactured products that are made from their own raw materials.

The NFU has suggested, and they should know, that the UK is in the process of losing a critical mass of milk suppliers and that we are no longer in a position where we supply the UK's “core milk requirement” which is around some 13 billion litres per year. In the last year there has been a 15 percent drop in UK Milk prices. In the last 10 years the Supermarkets’ margins (that is the the amount of the price they take on milk) have doubled in ten years. Now with a trend for both the processor and retailer to be the same, we have a situation where they take over three quarters of the price of a pint. We have now reached the situation where in a land renowned for Dairy farming and where even though the price of our milk is cheap, we are now become a net importer of milk.

Ironically it was a development of railway communications during the industrial revolution that provided the means to deliver the farmers milk to our towns and cities and ironically as a knock on effect there was a spread of diary production. It is doubly ironic that the first supermarkets (Sainsbury’s in Covent Garden, London, in 1869) sold what was then called “railway milk” from churns. The milkman arrived next delivering direct to our doorsteps, his near demise followed some years later was a direct result of super market price-cutting which has now, more or less, effectively killed him off.

The UK Government as early as 1914 recognised that milk was important for nutrition in children, that it helped prevent rickets, and provided vitamins. And so the first government attempts to regulate milk’s supply and quality came about. Pasteurization was duly brought in to kill of certain bacteria. We now have low fat milk, slimmed milk, semi skimmed milk, etc – one thing to think about is that full fat milk is only 4 percent fat, low fat milk being 2 percent (or less) and that milk is approximately 95 percent water anyway.

During the good times, pre Mrs Thatcher, the banks fell over themselves throwing credit at framers to encourage them to (as the Government and the EU wanted) to ever expand their production. Once Mrs T (and the Conservatives) who was never interested in farming anyway, being far to enamored of dodgy money men in the City, allowed Milk quota’s (effective cuts) the bad times had begun for our Dairy farmers and oddly enough the banks stopped calling with offers of cheap credit.

What can best be described as industrial milk production is not without its problems – slurry production being one of them, which can be enormously toxic and environmentally damaging. Something else to consider is that modern cows to produce large amounts of cheap milk, a While a modern Frisian may produce as much 4 times as much milk as equivalent cows did 50 years it only has three milking years in which to do it.

The talk of a milk ombudsman is welcome, but it needs to be more than talk, there is a need for action, before our dairy farmers (and our farmers) are driven out of business entirely. What may follow if nothing is done may not be pretty, it may be semi industrial and serviced by cheap migrant Labour. Supermarkets have to take a share of the blame for aggressively pursuing ever greater shares of the profit.

Successive UK Governments (both Conservative and Labour) also failed to take any meaningful action – this either being down to a combination of nice financial inducements from large Supermarkets and / or a general indifference to the agricultural sector. We, as consumers also have to take a share of the blame because we allowed all of these things to happen, if we want quality milk and dairy products (that are produce from UK milk) then we will have to change the way we buy, if we do that then out farmers will get a better deal.