UK Milk- The current picture (ish)

Most milk is still produced traditionally in the UK based on grazing cows outside in the summer and feeding conserved grass or forage in the winter when the cows come inside sheds to shelter from the elements.
This is a bit of a general statement; but so is the next one.

Consumers (sometimes known rather sexistly (is that a word)) as the Housewife, expect food to be cheap.


The percentage of income spent on food has shrunk from 33% to 15% in the last 50 years.

Farmers are paid less now per litre of milk than they were 20 years ago.

Petrol price in that time has risen from 40ppl to 111ppl.

Do the math!!

This has had a serious impact on the profit per litre of dairy farmers and now around 80 dairy farmers per day leave the industry (Source: DairyCo Datum)

If your business made only a few pence for every unit of product you produced in your business how would you make more money?

There are 3 basic ways of doing this

1) Charge more for each unit

2) make each unit more cheaply

3) produce more units


Dairy Farmers are no different to any other business in basic economics and because dairy farmers don't have a lot of control over the price they charge for milk so options 2 and 3 are their only way to make more money.

So, it is no surprise that the way milk is produced is changing and it seems to be polarising into the following two systems- this once again is a generalisation so don't start on me!!

1) Low input extensive grazed systems where capital and input costs are kept to a minimum so that lower yields can be profitable at a higher unit profit

2) Large intensive systems where large number of cows are kept indoors and their diet, environment and health and welfare are strictly controlled to produce large volumes of product with lower unit profit.


I said that dairy farmers were no different to other businesses, well they are except for the fact that they do not have machines (yeah i know they have tractors but bear with me) they have animals and this, if we don't watch out, is where we may come unstuck as the consumer has a bit of an love of animals as well as a love of cheap food.


My study over the next 12 months is to try and find out if consumers are actually worried about where their food comes from and if they find they don't like how we produce their milk, are they happy to pay more for it to be produced in a different way.