The British boss of dairy giant Arla said customers are likely to face higher prices to buy a pint of milk as farmers come under pressure from rising costs.
We have time for cheap milk,” Ash Amirahmadi told the PA news agency as the company unveiled its plan for the next five years.
Farmers have been confronted with depressed milk prices for years. Over the past 10 years, overall consumer prices have risen by 26%, Mr Amirahmadi said, but the price of milk has fallen by 7% over the same period.
“This strategy is about improving the profitability of fresh milk,” he said.
“We’ve seen farm, feed, fertilizer and fuel inflation starting around June or July last year.
“There’s already some pressure building up, but since the Ukraine crisis it’s increased exponentially, especially things like fertilizers.”
It might take time before the costs are passed on to buyers, he said, but things are likely to change over the next five years.
“If you look at what we are paying our farmers today, we are paying over 30% more than we were a year ago. They need it.”
Milk production is still declining, he said.
Arla’s five-year strategy could result in Arla becoming the first dairy to export milk on a large scale from the UK to tap into higher milk prices abroad.
The company said there are signs that global demand for dairy products will increase by 2 percent every year for the next half decade.
She warned that there were “clear signals” that milk producers might not be able to cope with this increase.
Recently fairer agreements between supermarkets and dairies were not enough to offset the huge recent price increases. Like many parts of the economy, agriculture is faced with runaway costs.
Fuel prices have risen significantly and fertilizer costs have also gone through the roof, Mr Amirahmadi said.
Products from Arla, the UK’s largest supplier of fresh milk, can be seen on supermarket shelves across the country. These include Cravendale, Lactofree, Lurpak and Anchor.
The cooperative’s 2,100 UK farms also supply some of the own-brand milk that supermarkets sell.
Farmers also face additional costs to invest in new production methods that can help combat catastrophic climate change.
Mr Amirahmadi said Arla farmers are experimenting with innovative new technologies, such as different feeds, that could reduce emissions.
Cows are major emitters of methane, a powerful greenhouse gas that has a much larger impact than carbon dioxide.
Changing the way cows are fed can reduce the amount of methane they burp or fart.
The company is also trying to increase biodiversity on its farms and is exploring different packaging options. By 2030, all packaging will be made from recycled materials.
https://www.independent.ie/business/farming/news/farming-news/we-are-calling-time-on-cheap-milk-says-arla-boss-as-farmers-costs-soar-41486399.html “We’re done with cheap milk,” says Arla boss, while costs for farmers are skyrocketing