Rising Costs of Farming Lead to Increase in Price of Wholesale Milk
The wholesale price of Jersey Dairy milk will increase by 8p per litre on Monday 14th February 2022 to address significant increases in farm costs.
The dairy industry has not seen inflationary cost pressures of such a magnitude for many years, if ever. The level of dairy farm cost increases, particularly fuel, purchased feed, fertiliser and wages are hitting farms hard and are set to erode all of the gains that our farmers have made in the past twelve months.
An independent review of the business case for our dairy farms indicates that farmers need an urgent price increase for the milk they supply to Jersey Dairy. The Dairy is owned by the farmers, and if they are to have a sustainable commercial future and continue to meet the market requirements for the wide range of products processed at Jersey Dairy, the price of milk needs to rise and so, the wholesale price of Jersey Dairy milk will increase by 8p per litre on Monday 14th February 2022.
Eamon Fenlon, Managing Director of Jersey Dairy stated, “All of the income raised from this price increase will be passed back to our farmers, however, this will be insufficient to address in full, the farm profitability issue that has been identified. Smaller farms will continue to run at a loss and the larger farms should reach breakeven.”
Over the last ten years, RPI in the Island has increased by 31% whilst the price of Jersey Dairy fresh milk, after this increase, will have risen by 28%.
Jersey Dairy has also suffered significant increases to its packaging, ingredients and operating costs and has increased prices on its export products to absorb some of these cost increases and to continue to distribute profits to our farmers.
Andrew Le Gallais, Dairy farmer and Chairman of the Jersey Milk Marketing Board commented, “We fully understand the challenging times that we are all experiencing at the present time in the Island, however, it is essential that Jersey Dairy implements these increases now if we want to have a sustainable commercial future and continue the environmental stewardship on our farms, along with a significant contribution to local food security.”
Jersey Dairy sought the opinion of the Minister regarding this price increase, as we are obliged to do, and has his support for this price increase.
“Our avowed intention remains to provide a consistent supply of a wide range of fresh, nutritious dairy products, along with a rich variety of public goods, to secure the continued enhancement of our iconic pedigree Jersey Cow within our beautiful countryside. ” said Andrew Le Gallais.