Milk at Any Cost? Why Cheap Prices Are Squeezing British Farmers

Milk looks cheap on the supermarket shelf. A couple of pints for a few pounds feels like a bargain—especially during a cost-of-living squeeze. But behind that price tag sits an uncomfortable truth: it costs around 40p per litre to produce milk sustainably (without a modest profit), yet many UK farmers are paid just 29p per litre. The gap doesn’t disappear. Someone absorbs it—and that someone is the farmer.

The Real Cost of a Litre of Milk

Producing milk isn’t simply a matter of turning grass into white liquid. Dairy farming involves:

• Feed, bedding and veterinary care

• Energy for milking, refrigeration and transport

• Labour, maintenance, compliance and environmental standards

• Investment in animal welfare and sustainability

When all of that is added up, 40p per litre is not a luxury price—it’s what keeps a farm viable. Paying 29p means operating at a loss, year after year.

Who Benefits From “Cheap” Milk?

Supermarkets often position themselves as champions of the consumer, promising low prices and “value”. Yet while farmers are squeezed below the cost of production, retail prices don’t fall proportionally. The margin is protected elsewhere in the supply chain.

This creates a system where:

• Farmers carry the financial risk

• Supermarkets retain pricing power

• Consumers are told low prices are inevitable

That isn’t a free market—it’s an imbalance.

Why This Matters Beyond the Farm Gate

When dairy farms disappear, the consequences ripple outward:

• Food security weakens as domestic production declines

• Rural economies suffer, losing jobs and skills

• Environmental standards slip when farming becomes a race to the bottom

• Choice disappears, leaving fewer producers and more corporate control

Once a dairy farm closes, it rarely reopens. Infrastructure, herds and expertise are lost for good.

Paying Farmers Fairly Isn’t Charity

There’s a persistent myth that paying farmers properly would send prices soaring. In reality, a fair farmgate price adds only a few pence per litre—a marginal change for shoppers, but the difference between survival and closure for farmers.

Fair pricing is about:

• Recognising skill, risk and responsibility

• Supporting higher welfare and environmental standards

• Ensuring long-term resilience in our food system

The Power of Changing Buying Habits

Consumers aren’t powerless. Every purchase sends a signal. Simple shifts can make a real difference:

• Buy milk from local dairies or farm shops where possible

• Support brands and retailers that commit to fair farmgate prices

• Be sceptical of “bargain” milk—it often comes at someone else’s expense

• Treat food as something with value, not just a loss-leader

A Choice About the Food System We Want

We can’t say we value British farming while accepting a system that forces farmers to sell below cost. Cheap milk today may feel like a win—but it risks costing us our farmers tomorrow.

If we want resilient food supplies, thriving rural communities and genuinely sustainable agriculture, then it’s time to accept a simple truth: farmers need to be paid what they’re worth. And that change starts not just with policy—but with what we put in our shopping baskets.