Dairy rebuild delay means £1m extra being spent every year

Thursday 20 June 2024

Aging infrastructure and equipment is holding Guernsey Dairy back at a huge cost.

This States pushed back plans to build a new dairy amid financial pressures, but that cannot continue, States Trading Supervisory Board President Peter Roffey warned.

A new Dairy would have operating costs of £1m. a year less, he told the States yesterday as they debated the Guernsey Dairy accounts.

Losses at the Dairy were trimmed back to £90,000 this year, but will rise again to a predicted £200,000 next year.

“If the next States does not find a way to move it from pipeline to delivery, I really worry about the future of Guernsey’s dairy industry and with it the island’s traditional countryside,” said Deputy Roffey.

Another factor holding back the Dairy in running as an efficient business was that it pays “way more” for the milk coming through its doors for processing than any other dairy, he said.

That was partly down to the high cost base of dairy farming in Guernsey, but mainly down to the tiny level of taxpayer support for the industry.

Support is now a quarter what it was in the naughties in real terms, he told the States. 

It is frozen in cash terms so will continue to be eroded.

“That’s good for the taxpayer but far less so for either the Dairy or the consumer.”

It meant the only way to keep dairy farms viable was for the Dairy to pay more and more in producer prices each year, while that cost and other cost pressures drove up gate and retail prices.

All this comes against a backdrop of declining milk sales.

Environment & Infrastructure is coming to the States in the third quarter of this year with a policy letter recommending changes to future subsidy payments to farmers.

Pictured top: Milk rolling off the Guernsey Dairy production line. From Guernsey Dairy Facebook.