Operating deficit leads to rise in wholesale milk price

Thursday 02 March 2023

The wholesale price for milk will be increased by nearly 13% to help farmers offset increased costs and to reduce an operating deficit at the Guernsey Dairy.

It will rise by 12.6% next month. The last time the wholesale price of milk was changed was in January 2022 and this latest increase will coincide with a 10% uplift in the price farmers are paid for their milk.

This increase is separate to the funding the Committee for Environment & Infrastructure asked of the Policy & Resources Committee late last year. That emergency funding was to compensate for the rise in cattle feed and fertiliser costs directly influenced by the war in Ukraine.

“In the past, the States provided far more by way of direct financial support for the local dairy industry,” said States’ Trading Supervisory Board member, Stuart Falla. “That was in recognition of the important role that farmers play, in managing the countryside and maintaining the Guernsey herd, which we all benefit from, whether we buy milk or not.”

 “That support has been significantly reduced in recent years, and its value continues to be eroded each year by the impact of inflation. In 2001, that financial support was £2 million, which in real terms would be equivalent to around £4 million now,” continued Mr Falla. “However in 2023 the figure will be just over £1 million.”

He said that farmers are having to rely more on income from their milk “and that is being passed on to consumers through the retail price”.

“The States need to urgently decide whether or not maintaining Guernsey's countryside through the continuation of dairy farming in Guernsey is a prize worth paying for directly from general revenue as they did in years gone by.” 

E&I is currently reviewing dairy farming in Guernsey to develop a sustainable, long-term plan for the island’s industry.