DairyCo reports that the average Defra UK farmgate price stood at 27.91ppl in April, a 0.76ppl (2.7%) decrease on the March average price and the farming press reported this week that the latest round of farmgate milk price cuts means farmers face losing 11p on every litre produced, according to rural accountants Old Mill.

Mike Butler, one of the leading farm accountants in the country, is described as being “passionate about agriculture and helping farmers”. He says that an analysis of a sample of farm accounts from 2011/12 showed that the average “real” cost of production was 37.09p/litre – without the single payment – well below the 26p/litre that many farmers now receive.

He emphasised, as did RABDF chairman Tim Brigstocke some years ago, that estimates of production costs should include farm overheads, family labour costs, pensions and staff training.

“Without fairer contracts the only way farmers will see prices increase is through a tightening of supply”, he said.

His verdict – unless there’s a change, UK will become reliant on imported dairy products:

“Without a doubt retailers are undermining the stability of their dairy sector, slashing their prices and passing those reductions down to the producers.”

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