Milk is expected to be the next supermarket item to be hit by the cost of living crisis, as farmers warn prices could increase by up to 50%.
Now it appears even basics like milk might be affected – here’s why.
How much will it increase by?
Michael Oakes, chair of the national dairy board of the National Farmers Union, told reporters on Monday that the cost of milk is likely to shoot up by 50%.
This means four pints of milk could increase in price from around £1.15 to £1.60 or £1.70.
He told BBC Radio 4′s Today programme: “It’s been quite a contentious subject, the price of milk, at retail level, for many years.
“What we’ve seen now for the last couple of years is rising inflationary input costs at farm level.”
Oakes explained that this has all been exacerbated by the war in Ukraine.
Why is it going up?
The Telegraph reported on Sunday that dairy farmers have been in crisis talks in Brussels over rising costs for feed, fertiliser and fuel along with disruption to the supply chain.
Oakes said conditions have worsened for farmers ever since the Ukrainian war broke out in February – the UK has reduced its fuel supply coming from Russia as a result, which has had a direct impact on British businesses, including farming.
With fuel prices rising, it means the cost of each pint is increasing.
Oakes said: “The milk price cost for production would be about 40p per litre – and the milk price for May is just about getting 40p per litre.
“The retailers are stepping up because the volumes are dropping and farmers are having to make tough decisions in the way they feed their cows.”
He said to cover fertiliser costs (which have gone up by 200%) as a farmer himself, he either had to borrow the money or get out of dairy.
Presenter Martha Kearney then asked: “So the supermarkets were beginning to worry they would lose out on the supply of milk?”
Oakes explained that processors such as Arla and Muller have already publicly called for retailers to act to avoid a milk shortage.
Is it just milk?
No, according to Oakes.
He said normally this means producers can focus their efforts on other products, but they are all being impacted by the increase in cost.
The farmer warned that other dairy products around the world are at an all-time high, too, meaning processors might be inclined to send milk abroad to get better value for money through their market returns.
John Allen at Kite Consulting, advisers to dairy farmers, also warned that the three-decades of low milk prices is coming to an end, meaning typical butter will shoot up in price to more than £2, too.
How long can we expect this to last?
When asked if the high costs are likely to continue, Oakes said: “The implication of the current rises could well last for two years.”
He said feed, fuel and fertiliser are the key inputs, adding: “We’re also seeing issues with labour and the cost of labour, so we’ve got a tsunami of costs coming towards us.”
Oakes also explained: “Unless farmers can make a return on the milk, the milk won’t get produced ultimately. We’ve seen costs go up and we will see perhaps buyers changing their behaviour.”
Is anything being done?
Allen told The Telegraph: “What is of concern at present is processors are getting inflationary costs as well and also we are short of milk around the world.”
Officials at the department for environment, food and rural affairs are reportedly in “listening mode” when it comes to hearing farmers and processors’ growing fears about what this all means for the dairy industry, but have not yet acted.
It remains to be seen if this means more people will join the growing portion of Brits who prefer plant alternatives to cow’s milk.