High milk prices?!

[9ball]

Nasty awful dairy farmers charging so much for their milk. making the poor poor dairies and supermarkets have to price fix milk. Bad bad greedy farmers.

'LONDON (Reuters) - The largest supermarkets and dairy processors have colluded to raise dairy product prices, increasing consumer costs by around 270 million pounds, the consumer watchdog said on Thursday.

"The provisional finding is that these supermarkets and dairy processors engaged in fixing the retail prices for milk, butter and cheese, in breach of the Competition Act, by sharing highly commercially sensitive information, including details of the levels of price increases, over a two year period of 2002 and 2003," The Office of Fair Trading said.

Companies probed include Asda, Morrisons, Safeway, Sainsbury and T***o, as well as diary processors Arla, Dairy Crest, Lactalis McLelland, The Cheese Company and Wiseman.'

[Annpan]

Well I get ,milk delivered by the local small dairy, who get milk from local dairy farms... I pay 47p per pint. The last I checked that was 8p more per pint than you get charged in the supermarkets.

Apparently 'farm gate prices' haven't changed, so why am I paying so much more than supermarkets if they are price fixing? it doesn't make much sense huh.

[Stonehead]

These are the annual average prices per pint from the Milk Development Council (MDC Datum).

...............Farmgate..Retail (doorstep)
2001........19.13........40.9
2002........17.05........42
2003........18.02........43.3
2004........18.45........44.3
2005........18.46........45.6
2006........17.94........47.3
2007........18.05........48

I've calcuated the the 2007 average price myself, using the figures for the seven months to the end of July. The doorstep prices were calculated from the MDC's monthly back price list. I'd do the retail outlet prices too but I've finished my cuppa and have to get back to work.

According to Defra farm income data, provisional net dairy farm incomes have fallen by almost 20% at current prices, with an average of £19,700 per farm for the year in 2006/07 down from £24,500 the previous year. In real terms at 2005/06 prices, this is a fall of 22%. (Information quoted on the MDC Datum website.)

Oh, and before rushing to kick T***o, they actually pay three of the four highests price to milk producers. The other is Waitrose. Full details on the MDC site.

[Shirley]

So it's not the farmers that are at fault but the processors and the supermarkets.

How about the milk that's delivered to your door by the likes of Wiseman's etc... has that been price fixed too?

[Feygan]

I've yet to meet a dairy farmer that was rolling due to rising milk prices. A few years back I worked fitting and servicing dairy parlours and even then if anyone had privately offered the farmers just 20p a litre, not only would they have taken it but likely also your hand and arm too. Dairy farmers tend to have a bum deal in the uk for prices. The money is all made between paturisation and the shelf.

[Stonehead]

Apparently 'farm gate prices' haven't changed, so why am I paying so much more than supermarkets if they are price fixing? it doesn't make much sense huh.

It's not so much about the actual price charged, it's about how the prices were set and the allegation is that the supermarkets shared pricing information to keep their prices on a par with each other.

Supermarkets are cheaper than doorstep delivery as they have huge power to set prices, plus economies of scale that local dairies can't hope to match. They can also have a lower margin because their turnovers are so vast.

[contadino]

Things are far simpler here. I buy milk from one of two farms (60 or 70 cents/litre). The supermarket cost is about €1.50/litre.

It's not delivered, but I have a gardening client next door to one farm, so I collect if I'm there at the right time.

[circlecross]

since we started getting milk delivered about a month ago, our plastic recycling is virtually nothing compared to a dustbin full about every fortnight. We oay about 50p pr pint, but that is the same as the shop around the corner, which we inevitably had to use as we were either busy or forgetful or both.

[Thomzo]

Don't forget that if you are getting it delivered, it saves you having to go out. I will pay for the convenience. I pay 50p a pint which I'm happy with.

Zoe

[ina]

As far as I know, T*** only pay some of their farmers - those that have a special contract with them - the higher price. They are the lucky ones...

Well, milk prices will have to go up a bit more if dairy farmers are to survive. At the moment they are saying things are looking up for them, as they are actually at long last getting a price for the milk that covers the cost - but costs are still rising (due to higher feed prices), and the movement restrictions through F&M don't help keep costs down, either; they are making proper pasture management (and therefore most efficient use of existing feed resources) often impossible. Plus you can't sell/buy stock at the best times, which may have an impact on calving times and so the list goes on...

[Stonehead]

As far as I know, T*** only pay some of their farmers - those that have a special contract with them - the higher price. They are the lucky ones...

There's only a penny or so difference between T***o's lowest and highest prices, although it does add up over thousands of litres.

[Peggy Sue]

I have been trying to persude my OH its better to get the milk delivered at 50p a pint than drive to somewhere when you run out...usually the garage who are all of about 2p cheaper.

He maintains the milk goes off more quickly, I don't know if it's 'older' or if it just has a tougher life- can anyone tell me?

We just had a note a work this week, where I have managed to persuade them to have it delivered, that the price of milk is going up because there is a world shortage of milk. Got to say it sounded like 'leaves on the track' excuse from British Rail- is there really a world shortage? What happened to the excess production we all suffered from not so long ago?

[hamster]

Lots of food prices are going up due to increased demand in emerging markets such as China. People are starting to eat a more 'Western' diet, and consumption of meat and dairy in particular is rising. Not sure where I read it, but apparently it's going to lead to sharp price rises in the near future.

[9ball]

Milk prices have been affected by the floods here - as the animal feed prices have shot up. Elsewhere in the world there have been drouts etc that have had the same effect. I would think higher milk prices have more to do with higher production costs than a lack of supply.
I might be wrong but I assume milk doesn't get shipped around the world as it perishes quickly, so I wouldn't say the world economy has a great sway on what we pay for a pint here anyway - it would be localised to GB and probably a bit of northern europe.

[Peggy Sue]

This is pretty much as I would have guessed.... seems strange Dairy Crest put the world shortage in writing!