British and German dairy farmers are suffering losses as the war in Ukraine drives up costs


Britain’s dairy farming is largely unprofitable after the costs of fertiliser, animal feed and fuel have skyrocketed, the National Farmers Union has said.

the invasion of oscow into ukraine has pushed up the main input costs for farmers. Shipments of fertilizers from Russia have stalled, putting pressure on prices, while exports of Ukrainian corn used to feed cows have fallen to a trickle. This is happening as European governments move to shore up food security as high prices threaten an inflationary spiral.

“Rapid input cost inflation, with fertilizer prices rising fourfold, animal feed prices up 70% and fuel costs continuing to rise, means that for most dairy farmers the cost of production is much higher than the price they are currently receiving for their milk .,” said Michael Oakes, CEO of NFU Dairy.

Retailers need to increase the price they pay milk producers from 40p to 50p ($0.66) per liter to ensure supply, said John Allen, managing partner at Kite Consulting. That equates to just over 28p a pint. The price consumers pay for a pint (0.57 litre) of pasteurized milk rose 17% year on year to 49p in February, the biggest increase since 2008.

German consumers should also expect to pay more for dairy and meat as production costs reach “extraordinary” levels, according to the country’s farmers’ association.

Moscow’s invasion of Ukraine has pushed up the cost of key inputs like fertilizers, which have tripled in price in Germany. Natural gas has also surged and is starting to seep into German grocery chain prices. Further jumps are likely in June as half-year contracts between food processors and retailers are extended, said Udo Hemmerling, deputy general secretary of the farmers’ association DBV.

“This week, dairy processors have increased their prices on some commodities by 10% due to exceptional energy costs,” Hemmling said in an interview. “In June we will see higher prices and then the farmer can get a share.”

Bloomberg British and German dairy farmers are suffering losses as the war in Ukraine drives up costs

Fry Electronics Team

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