THE wholesale price of Jersey Dairy milk will increase by 8p per litre from today, with farming costs increasing at a ‘magnitude not seen for many years’ blamed.
The move comes amid reports of widespread soaring supply costs across the world, which have contributed to inflation rates spiking to their highest levels in years in many countries, including the US and UK.
A statement released by Jersey Dairy said: ‘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 12 months.’
The statement added that an independent review had found that farmers needed an ‘urgent price increase’ for the milk they supply to Jersey Dairy, and this would result in a hike of 8p per litre.
Retail milk prices currently vary from £1.24 to £1.29 per litre.
The dairy could not disclose the exact wholesale price because of customer confidentiality.
Jersey Dairy managing director, Eamon Fenlon, said: ‘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 break-even.’
He added that it would be for individual retailers to decide whether to pass the price rise on to customers.
Andrew Le Gallais, dairy farmer and chairman of the Jersey Milk Marketing Board, said: ‘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.’
The dairy’s statement said that milk prices had increased by 28% over the last ten years.
It added: ‘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.
‘Jersey Dairy sought the opinion of the minister [Kirsten Morel, Assistant Minister for Economic Development] regarding this price increase, as we are obliged to do, and has his support.’
Jersey Dairy last increased its wholesale price in March 2021 by 5p per litre.
