Chichester milk farmer speaks out about supermarket price war

Dairy farmers Chris and Caroline Spiby with their son Joshua, ten. ''C120995-2 Chi Milk Farm  Photo Louise Adams
Dairy farmers Chris and Caroline Spiby with their son Joshua, ten. ''C120995-2 Chi Milk Farm Photo Louise Adams

Dairy farmer Chris Spiby has spoken out about the controversial supermarket cuts to milk prices, as his farm in Sidlesham is suffering at a time when buyers are not paying the production price for dairy products.

Chalder Farm, a family business passed down by his parents, has a herd of 500 cows which graze on the nature reserve at Pagham Harbour, but despite having scale on its side the dairy has failed to pay its way. Four years ago his wife Caroline turned her hand to ice cream-making to diversify under the ‘Caroline’s Dairy’ brand.

Mr Spiby said: “With the recent price cuts of milk in supermarkets it is really questionable whether to continue with wholesale milk production at all. We are in a good area for tourism and have a large local population so it may be better to diversify the ice cream business further to include other dairy products.”

Largely caused by a fierce supermarket price war using discounted milk to keep customers away from competitors, the problem has been worsened by the three main processors falling over one another for supermarket share.

Special offers in the supermarkets have seen milk priced at increasingly-low levels, far cheaper than the bottled water on sale. Farmers are now paid as little as 24p per litre (14p per pint) for their milk and yet it costs them 30p per litre to produce it. Home-grown feeds such as maize and grass silage are of much poorer quality this year due to the lack of sunshine and so farmers will need additional supplementation this winter, and the price of additional feeds has also rocketed.

These are the reasons why the population of farmers in Britain has reduced from 37,000 to 11,000 in 20 years, and Mr Spiby thinks it will continue to fall if nothing is done. Even more devastating is that the reduction of dairy farms would mean a loss in our countryside and British Heritage, as well as a huge loss for local economies. Not only do the farmers lose out, but so do their suppliers, and Mr Spiby said each dairy farm will have around 50 to 60 suppliers for various things so there are huge economic implications.

Currently Marks & Spencer, Waitrose, Sainsbury’s and Tesco do have a fair and transparent price formula with their suppliers which means they pay the cost of production, however they continue to devalue the product with unnecessary special offers. Other milk buyers do not have a cost-of-production tracker to agree a fair price with suppliers, which means farmers are making huge losses. The farmers did gain a small victory on July 25, when they protested and managed to convince the three main milk processors to delay and even scrap their price cuts to the cost of milk which would have had further implications for farmers.

The next step for dairy farmers is to fight the coffee chains which pay seven-and-a-half pence for the milk in a £2.50 latte, and farmers are asking for just a two-pence rise so the cost of production is paid and they aren’t losing out. Mr Spiby pointed out that coffee chains are all for fair trade when it comes to the coffee, but not when it comes to milk.

He continued: “It would seem that the price to save the entire dairy industry is as little as 5p per pint. But some supermarkets are unwilling even to pay this pittance in their greed for profit and market share.”