County dairy industry in meltdown

Shropshire's dairy industry continues to head for meltdown, with high production costs, low prices and disastrous weather conditions pushing farmers to breaking point.

Many are still quitting in their droves, with recent figures suggesting two dairy farmers a day are turning their backs on the profession. It means retailers are now buying a million litres a day from Holland and Belgium to make up the shortfall.

Dairy consultant John Allen, managing director of Kite Consultants in Brewood, Staffordshire, said 700 farmers left the industry last year and the national herd declined from 2.1 million in 2005 to 1.9 million.

"There is, despite the credit crunch, a desire by consumers to want to have fresh products locally sourced," he said.

"We have got all these issues about carbon footprints, all the extra costs of transport: liquid milk is not a good thing to transport, it doesn't do much for the quality of the milk to be shipped hundreds of miles around Europe.

"It's better if it's produced locally on local farms and actually supplied into local stores and kept fresh for the consumer. That's what the UK consumers value and welcome."

First Milk, one of Britain's biggest cheese processors, has already been forced to lay off a tenth of its staff because of the domestic milk shortage.

Meanwhile, research published in The Grocer magazine showed that the cost of milk has increased by 14 per cent in the last 12 months.

The big four supermarkets – Tesco, Asda, Sainsbury's and Morrisons – have all put up prices in the past seven days from £1.44 to £1.53 for four pints, in response to higher farm gate costs caused by rising prices of fuel, feed and fertiliser.

NFU food and farming adviser Peter Garbutt, based in Telford, said he did not believe the trend in importing milk would continue.

"We do not believe that processors will keep shipping milk as it is expensive, takes some time to deliver and cannot be seen as a sustainable long-term solution," he said.

"The NFU has welcomed recent increases in milk prices and we are always pushing for better milk contracts and a better return for our members. As far as importing milk goes, it will always be a cheaper option to secure milk supplies from farmers in Great Britain and a decent milk price injection will help reverse declines in production."

By Rural Affairs Editor Nathan Rous