Britain's dairy farmers face an uncertain future as a global oversupply of milk drives down prices, leaving many struggling to break even. Paul Tompkins, the third-generation farmer who runs a 234-hectare farm in Yorkshire, is particularly hard hit, with his milk processor paying just 29p per litre for the milk from his 500-strong herd. This works out at a daily loss of £1,800, forcing him to question whether he can sustain his business.
The price shock comes as farmers are already reeling from a host of other cost increases, including fertiliser and fuel costs, as well as chronic labour shortages since Brexit and the pandemic. The government's decision to introduce inheritance tax on agricultural assets above £2.5m has also added to their financial woes.
Tompkins is not alone in his struggles. Nearly 20% of British dairy farmers have quit the industry since October 2019, with many more expected to follow suit if prices do not rise. In fact, farm consultant Mike Houghton predicts that as many as 10% of dairy producers – or 700 farmers – could leave the industry for good.
The problem is exacerbated by a lack of transparency in the supply chain. While supermarkets like Tesco and Sainsbury's have committed to paying their farmers based on the cost of production, this means that many others are left at the mercy of processors who can exploit them for all they're worth. This has led to a situation where some farmers are producing record-breaking volumes, but still struggling to make ends meet.
The situation is further complicated by the fact that milk prices do not always reflect the cost of production in real-time. According to the Agriculture and Horticulture Development Board (AHDB), it can take up to seven months for lower prices to feed through to consumers. This means that dairy farmers may face significant financial pressure before they start seeing any benefits.
In short, Britain's dairy farmers are facing a perfect storm of low milk prices, high costs, and a lack of transparency in the supply chain. Unless prices rise soon, it is likely that many more will be forced out of business, leaving the industry in crisis mode.
The price shock comes as farmers are already reeling from a host of other cost increases, including fertiliser and fuel costs, as well as chronic labour shortages since Brexit and the pandemic. The government's decision to introduce inheritance tax on agricultural assets above £2.5m has also added to their financial woes.
Tompkins is not alone in his struggles. Nearly 20% of British dairy farmers have quit the industry since October 2019, with many more expected to follow suit if prices do not rise. In fact, farm consultant Mike Houghton predicts that as many as 10% of dairy producers – or 700 farmers – could leave the industry for good.
The problem is exacerbated by a lack of transparency in the supply chain. While supermarkets like Tesco and Sainsbury's have committed to paying their farmers based on the cost of production, this means that many others are left at the mercy of processors who can exploit them for all they're worth. This has led to a situation where some farmers are producing record-breaking volumes, but still struggling to make ends meet.
The situation is further complicated by the fact that milk prices do not always reflect the cost of production in real-time. According to the Agriculture and Horticulture Development Board (AHDB), it can take up to seven months for lower prices to feed through to consumers. This means that dairy farmers may face significant financial pressure before they start seeing any benefits.
In short, Britain's dairy farmers are facing a perfect storm of low milk prices, high costs, and a lack of transparency in the supply chain. Unless prices rise soon, it is likely that many more will be forced out of business, leaving the industry in crisis mode.
I mean, think about it, 29p per litre? That's not even enough to cover the cost of production, let alone make a profit! And it's not just Tompkins, it's nearly 20% of farmers who have already quit or are thinking of quitting. The system is rigged, man... 
they're already struggling with Brexit & pandemic stuff and now milk prices are dropping like crazy 
I mean, 29p per liter? that's like, super low 
i can imagine how hard it must be to break even daily 
and if prices don't rise soon, more are likely to follow 
it's just not fair 
and it's gonna take some effort to fix this 
but I'm sure with a bit of luck & innovation, we can get things sorted out 
. Maybe introduce some kind of support system or something? I don't know, but it can't be good for the industry if things keep going like this...
Farmers are struggling so much with the low milk prices and high costs, I feel for them! It's like they're running a business in the dark, not knowing how long it'll take for the prices to change. The lack of transparency in the supply chain is just adding fuel to the fire 
. If the government can find a way to make things more fair and stable for farmers, I think we'd see a lot of people staying in the industry rather than quitting 
Anyway, I guess the industry needs some serious TLC (or should I say, TLM for liquid milk?) to get back on its feet. 
. I mean, who can afford to stay in an industry where you're basically losing £1,800 a day just for producing milk? It's crazy that Paul Tompkins and his fellow farmers are having to question whether they can even keep their business going. And don't even get me started on the fact that some supermarkets are exploiting them for all they've got, making it impossible for others to compete. I mean, what's the point of even trying when you know you're just going to be stuck in this vicious cycle of low prices and high costs?