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Milk will cost around £1.85 a litre from next month when price rises facing the Guernsey Dairy and local farmers are passed on to customers.
The Dairy says its wholesale milk price will rise by 4% from 1 July - reflecting the additional amount it will be paying to farmers for the raw product.
Cost pressures facing the Dairy and farmers include the age and current condition of the dairy itself - as discussed by the States this week - and outside pressures caused by Brexit and the war in Ukraine.
The Dairy is also paying farmers 4% more for their milk this year, with a claim that the direct financial support the States provides to farms has fallen in real terms to around a quarter of the amount they received in 2000.
“The States does provide direct financial support for local dairy farmers, in recognition of the important role they have in managing the countryside and maintaining the Guernsey breed," explained Dairy Management Board chairman, Mark Thompson.
Pictured: Dairy farmers will be paid 4% more by the Dairy this year, with the price rise passed on to customers.
"Government also provided emergency support, following the outbreak of the war in Ukraine, to help offset the sudden rise in the cost of animal feed, fertiliser, and other essentials," he said.
“However, the baseline funding which the industry receives has significantly reduced, and continues to be eroded each year by the impact of inflation.
“In 2000, that financial support was £2 million, which in real terms would be equivalent to around £4 million in 2024. However this year is just over £1 million. The result is farmers are having to rely more on income from the milk the Guernsey Dairy purchases, and that is having to be passed on to consumers through the retail price.
"Guernsey Dairy has also been impacted by other cost increases. The ability to absorb these through efficiency savings is severely limited within the current facility, due to its age and condition, these too are unfortunately having to be passed on.”
Pictured: The war in Ukraine and Brexit are among the factors contributing to price rises here.
The last Guernsey milk price rise was imposed on 7 January - when the Dairy put its wholesale prices up 6.3%.
Before that, prices had risen 12.6% in March last year, and 5.9% in January 2022. That price rise was the first in two years.
The wholesale price is what the Dairy charges for the milk that it supplies to shops or milkmen carrying out doorstep deliveries.
Each retailer can then set the price that they sell to their customers - however, the majority charge the wholesale price to individual customers, with the Co op and Checkers Express both currently selling a litre of milk at £1.78, meaning it will go up to £1.85 next month.
Pictured: Retailers and milk men are all charged the same price for milk, with most large retailers selling it on to customers at the wholesale price too.
This week the States discussed the Guernsey Dairy while dissecting the island's accounts.
In 2023, the Dairy trimmed its losses back to £90,000, but the States were told those losses will rise again to a predicted £200,000 this year.
The Committee for the Environment and Infrastructure is undertaking a comprehensive review of local dairy farming, to try and identify a sustainable model and viable long-term plan for the industry.
Its proposals are expected to be debated by the States later this year.
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