10% of milk price is wasted, FCC says

A LONG-AWAITED study of the dairy supply chain has found that up to 10% of the retail value of dairy produce is needlessly wasted.

That means that 5p in the price of a litre of milk is spent on spillage, stockpiling and damage between the parlour and the supermarket shelf.

But the Food Chain Centre’s 18m value chain analysis also showed how closer working between dairy farmers, processors and the retailers can cut out some of that waste.

At the head of a list of key improvements for farmers was levelling out production profiles and managing feed better.

The report also found retailers must manage demand better and pass accurate data down the supply chain so farmers and dairies know their production targets.

Processors can cut costs by ensuring that vehicles are used more intensively.

Currently only 28% of a vehicle’s time is spent on the road and 20% of that is empty.

And a staggering 1.5% of the retail value is lost through theft and damage to products, the study said.

A pilot study of Dairy Crest’s cheese chain led to the immediate setting up a formal supplier association which will have input from Somerfield.

“It will be a great help in linking developments in milk production to the customer’s requirements,” said Arthur Reeves, milk purchasing director at DC.

“Hopefully the project itself and the publication of this report will make a contribution to improving trust in the dairy industry.”

Richard Stanbury, director of Dairy Crest Direct, said: “The project highlighted the complexity of the supply chain. I believe this would be an eye-opener for any milk producer.”

To download the full report  – click here … (3mb pdf)