Rising dairy farm production costs lead to an increase in the price of wholesale milk
The wholesale price of Jersey Dairy milk will increase by 15p per litre on Monday 9th January to address significant increases in farm costs over the last year.
The Russian invasion of Ukraine, global trade barriers (including Brexit) and Chinese Covid lockdowns have all caused supply chain issues, market volatility and sharply moving currency exchange rates, creating uncertainties, and impacting costs at Jersey Dairy and on Jersey dairy farms.
The level of cost increases on local dairy farms, particularly fuel, imported feed, fertiliser, and wages are continuing to hit farms hard.
Jersey Dairy has also been subjected to significant inflationary cost increases on raw materials, packaging, fuel, energy, etc. During 2022, Jersey Dairy has implemented significant price rises to export markets to finance these escalating costs, with more increases planned for 2023.
A recent independent review of the profitability of Jersey dairy farms indicated that local dairy farmers need an urgent increase in the price they receive for the milk they supply to Jersey Dairy. Jersey Dairy is owned by the dairy farmers, and if they are to have a sustainable commercial future the wholesale price of milk needs to increase, as it has done elsewhere. The average price paid to dairy farmers in the UK has increased by 54% over the last year.
Eamon Fenlon, Managing Director of Jersey Dairy stated, “All of the income raised from this price increase will be passed back to our dairy farmers, however, this will be insufficient to address in full the farm profitability issue that has been identified, and hence price increases will also be implemented in our export markets. Government are also exploring how they can play their part in addressing the situation.”
Phil Le Maistre, Dairy farmer and Chairman of the Jersey Milk Marketing Board commented, “We fully understand the challenging times that all our customers are currently experiencing with the rising cost of living. However, it is essential that Jersey Dairy implements this price increase now if we want our dairy farms to have a sustainable commercial future. Enabling them to ensure the future of our iconic Jersey cow in her Island home, continuing their environmental stewardship of our beautiful countryside, along with the significant contribution they make to local food security with the wide range of nutritious products produced from the milk they supply to Jersey Dairy.”
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.