Farmers to benefit from milk price rise

Wednesday 05 January 2022

The price we pay for dairy products is going up, because Guernsey Dairy has increased the "producer price" it pays the island's dairy farmers for their milk.

From the beginning of this week, the dairy is paying the farmers 5.9% more than it previously was for the raw milk it then treats and sells to us either as pasteurised milk, or as milk products like butter and cheese.

It's the first time the 'producer price' has been put up in two years and reflects the significant increases that farmers have faced in their own costs including the price of feed, fertiliser and other farming essentials.

Pictured: Guernsey's dairy farmers will get slightly more for their milk, while we'll be paying slightly more for the end product when we buy it. 

The decision to award the 5.9% increase was made following an independent review of local farm costs. Michael Bray, president of the Guernsey Farmers Association, said the increase will be welcomed across the farming community.

“It is great to see the recognition and support that the Guernsey Dairy is giving local farmers and we would like to thank islanders for their continued loyalty shown to our local dairy products,” he said.

“Our island farmers have seen unprecedented rises in input costs since the last price rise in 2020. During 2021, with all of the uncertainty islanders were facing, farmers decided unanimously that they would absorb the costs being felt. Unfortunately, what we have seen over the last year is continued increases across the food sector, and this has now meant that some of these costs have had to be added onto the producer price for 2022.”

Pictured: Lactose free milk was introduced last year, but red, blue and green (full fat, semi and skimmed) milk remain hugely popular products.

To coincide with the producer price increase, the wholesale liquid milk price is also going up. From Sunday 2 January, the price Guernsey Dairy sells a litre of milk for went up by 4.8%. As retailers are now able to set their own prices for milk, the amount we pay is likely to vary. While some retailers will sell milk as a 'loss leader' and offer it at a relatively discounted price, others will sell it for the wholesale price or above. 

Guernsey Dairy said the 4.8% wholesale liquid milk price rise is below the current rate of inflation and as well as covering the increased rate paid to farmers for the milk, it will also need to cover other price hikes the dairy has faced, including the cost of the supplies used in the production of packaging and other consumables.

Guernsey Dairy Managing Director Andrew Tabel said it continues to be up to individual distributors and retailers what price they sell milk for, but he felt the increase in wholesale price was essential to the maintenance of the countryside and the unique Guernsey cattle breed.

Pictured: Andrew Tabel, Managing Director of Guernsey Dairy.

“Retail prices are no longer set by the States, so it will be for milk distributors and retail outlets to decide whether to absorb the increase, in part or in full, or pass it on to their customers,” Mr Tabel said. “Buying local milk helps support the economy and ensures the money is reinvested to the benefit of the island.

"Guernsey farmers are custodians of our countryside and guardians of the world-famous Guernsey cow in her island home. As well as taking care of our natural environment, they are required to meet RSPCA Farm Assured animal welfare standards. The Dairy’s processing and sale of liquid milk and milk-products provides the financial mechanism that enables the continuation of the island’s dairy farming industry.”

Pictured top: Guernsey's famous cows produce the island's iconic milk.