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farmers to get 5p a litre more A REPORT published yesterday says dairy farmers need almost 5p per litre more for their milk to receive a fair price.

A decade of prices below the cost of production have resulted in dairy cow numbers falling by 250,000 in five years and total milk output dropping by 800 million litres.

Dairy producer numbers are also falling by 6.5 per cent a year, and many of those left have no money to invest in their business.

The report said most producers received 25p or 26p a litre, but said that they needed nearly 30p. The report was commissioned by First Milk, the leading farmer-owned dairy business, which has 2,600 farmers.

Agri-business consultancy Promar International compiled the report.

It wants a new formula to calculate prices - one that takes account of rising production costs and allows farmers to make a profit to reinvest.

It said that for too long, many farmers have made losses over many years, saved from bankruptcy only by the asset of their farms.

The report calculated the price farmers should receive after taking account of increasing production costs, family labour and a profit margin of ten per cent.

First Milk chief executive Peter Humphreys said: "While the price paid for their milk has risen significantly, further cost rises are inevitable and extensive investment is needed."

8:27am Tuesday 4th March 2008

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