Dairy farmers should be paid almost 30p/litre for their milk, according to a report released today.

The Real Price of Milk was produced by consultant Promar and commissioned by milk co-op First Milk, which has 2600 members.

It calls for a new formula to calculate a consistently fair price that takes account of rising production costs and allows farmers to make a profit that they can reinvest.

Increased production costs

Taking into account increased production costs, family labour and a 10% profit margin to reinvest, farmers should receive 29.64p/litre, the report said.

First Milk chief executive Peter Humphreys said: “For many dairy farmers we are at a pivotal moment.

“While the price paid for their milk has risen significantly further cost rises are inevitable and extensive investment is needed.

“These factors must be recognised be recognised in the prices paid for farmers’ milk.”

Report

Willie Lamont,  NFU Scotland milk committee chairman, said: “This is a very informative and helpful report.

“For a number of years now, dairy producers have been experiencing prices which are simply unsustainable and which are all too often exceeded by costs of production.

“As a result, we have seen many hundred dairy farmers leave the industry because they couldn’t afford to keep going, let alone reinvest for the future.

“‘Fair trade’ is a term that is often used too flippantly, but it is exactly what is now required. Farmers, regardless of where in the world they live and work, require fair reward for what they produce.

“The report clearly sets out what processors and retailers must deliver in order to secure a sustainable dairy industry in this country. They must act now if they don’t want to suffer a milk shortage once again.”