Leeds milkman speaks out as prices set to soar amid rising costs for farmers
and live on Freeview channel 276
Phil Heaton, who runs Tingley-based P & CLP Heaton milkman, made the comments after it was announced that the cost of dairy products look set to soar by up to 50 per cent.
As reported in The Telegraph, leading figures in the dairy industry flew into Brussels last week for crisis talks, as it was said that the cost of four pints of milk will jump from around £1.15 to between £1.60 and £1.70 according to Kite Consulting, the UK’s leading adviser to dairy farmers.
However, Phil, who runs the business after his dad, also named Phillip, retired seven years ago, said he has not been able to buy milk from his supplier at the price of £1.15 for quite some time.
Phil, 47, from Tingley said: “It isn't just milk prices going up, it's everything.
“I can't even buy at that price myself to then sell on to my customer.
“If I look back at an invoice from this time last year, I’m paying 27 pence more for a two-litre and seven pence more for a pint of milk in a glass bottle.
“It's really tricky because I think I've had eight price increases over the last year. We're just trying to absorb as many as we can without passing on to the customer.“
Some of the factors driving up costs, Phil said, is the rising day-to-day costs facing farmers, with them paying higher prices for everything from fertiliser for the grass the cows eat to additional taxes on plastics and red diesel.
This alongside the undervaluing of milk by major supermarkets is putting a strain on local, independent milkmen.
Phil said: “We've been with Dales Diaries for 10 years and they've been brilliant, but the last 12 to 18 months it's just constant price increases.
"Some of the emails I've had from the dairy about price increases is that any business that deals with plastic is now getting a £200 tax per tonne on plastic and the Government this month have introduced fuel duty on red diesel which is used by farmers for tractors, generators, and then they've got to deliver milk out to us so they're sending out trucks.
"It's always been a business that's always been on bit of an edge due to supermarkets selling milk as a loss leader to get customers in every day.
"Supermarkets will still, I feel, be able to sell it at the price they are currently selling at now because the amount of products they're selling at the supermarket means they can pass that loss on to other things.
"If you went to Asda now to buy four pints of milk, it is right in the back corner of the store, so you've got to go past everything to get to the milk and then when you come out to pay, you've got to walk back past everything to get to tills, so you've nipped in to buy a pint of milk you end up coming out with a basket of shopping, spending 10/12 pounds, you haven't just got that milk.
"The supermarket is always going to want to keep milk and bread as cheap as they can just to get people in on a daily basis.
"They can absorb it on a product but all we sell is milk, eggs and orange juice. We can't absorb this cost."
He added: “I think we're all in same mindset and it's just a case of riding through this next 12/18 months and hopefully things start picking up
“We've been trading for 47 years, we've still got customers that we started with from day one so there's a massive loyalty side.
“The customers so far have been brilliant but you've got to be careful if if you start trying to push it too much, you'll lose business."
Last week, the boss of diary giant Arla said he is “calling time on cheap milk”, warning that customers are likely going to face higher prices as farmers are being squeezed by soaring costs.
Ash Amirahmadi, who is the managing director of Arla Foods UK, which is based in Stourton, made the comments as the business set out its plan for the next five years.
Farmers have been facing squeezed milk prices for years. In the last 10 years consumer prices have gone up 26 per cent as a whole, Mr Amirahmadi said, but the price of milk has dropped by seven per cent in the same period.
“This strategy is about improving the profitability of fresh milk,” he said.
“We saw the inflation on farms, on feed, fertiliser and fuel, starting around June or July last year.
“There were already some pressures building, but since the Ukraine crisis that’s just increased exponentially, particularly things like fertiliser.”
It could take some time for costs to be passed through to shoppers, he said, but over the next five years things are likely to change.
“If you look at what we’re paying our farmers today, we’re paying over 30 per cent more than we were a year ago. They need it.”
Milk production is still dropping, he said.
Arla’s five-year strategy could see it become the first dairy to export milk at scale out of the UK to tap into higher milk prices abroad.
The business said there are signs that demand for dairy around the world will increase by two per cent every year over the next half decade.
It warned there are “clear signals” that milk producers might not be able to meet that rise.
Recent fairer deals between supermarkets and dairies have not been enough to offset huge recent price rises. Just like for many parts of the economy, agriculture is facing runaway costs.
Fuel prices have increased significantly and fertiliser costs are also through the roof, Mr Amirahmadi said.