PROFITABILITY on dairy farms ‘remains a challenge’, Jersey Dairy has said, after Guernsey Dairy announced it was expecting to make a loss of more than £500,000 this year.
Supply-chain issues and market volatility caused by Brexit, Covid and the Russian invasion of Ukraine have impacted costs and profitability at Jersey Dairy and across the Island’s dairy farms, with these challenges continuing into 2023, according to the company.
January saw the wholesale price of milk rise by 15p per litre, the second increase in less than a year after prices went up by 8p per litre in February 2022.
Guernsey Dairy has now also announced a wholesale price increase of 12.6%, which will come into effect on 12 March.
In a statement provided to the JEP, Jersey Dairy said: ‘In collaboration with our customers, we did manage to increase our prices on products sold in the local market and in our export markets, which offset some of the inflationary cost increases.’
It continued: ‘The level of cost increases over the last year on our dairy farms – particularly in relation to fuel, imported feed, fertiliser and wages – hit our dairy farms hard and to help address this, the government did provide support in 2022 with a £400,000 grant.’
The dairy added, however: ‘In comparison to the UK and the EU, the support for agriculture in Jersey is quite low and the government recognises that this needs to be addressed.
‘There are ongoing discussions with government as to how best to address this challenge.’
A government support package was unveiled in September last year, which was designed to help the dairy-farming industry to survive the ‘double whammy’ of spiralling operating costs and summer drought conditions.
