Industry leaders from across the UK expressed “sheer desperation” as they gathered for an emergency summit in central London yesterday to discuss falling milk, lamb and arable prices.
The meeting followed days of protests by farmers including Milk Trolley Challenges, which saw protesters remove cartons of milk from shops including Asda, Morrisons and Lidl before paying for it and taking it away or dumping it at checkouts.
There have also been blockades at distribution centres and even the bringing of cattle into supermarkets.
Farmers estimate it costs between 30p and 32p to produce a litre of milk but the average price paid across the UK is 23.66p following a drop of 25 per cent in a year.
Meurig Raymond, president of the National Farmers Union (NFU) of England and Wales, said many farmers faced “big decisions” about whether to leave the industry in the next few weeks as they struggle to pay bills and face rising debts.
Speaking outside the summit, Mr Raymond said: “Obviously the industry is in crisis. There’s despair within our members. I’ve been farming for 45 years and this is the worst I’ve known, particularly the dairy sector and the lamb sector.
“We’ve seen a 30 per cent fall in milk prices in the last 12 months and we’ve seen good quality new-season lamb being sold at least £15 per animal less than last year.
“It’s a crisis I haven’t seen in my farming career.”
He added: “For lots of farmers there’s a cash flow issue. They’re finding it difficult to pay bills, the overdrafts are increasing. Unless things improve, they may well have to make some big decisions in the next couple of months.”
Following the meeting, Mr Raymond said farmers were facing “all the risk in these extremely volatile times”.
“I believe there is now, at long last, a recognition of the dire straits that farmers are finding themselves in,” he said.
“People are losing money. There is no way farmers can sustainably stay in business with these sorts of prices.
“There has been a race to the bottom to devalue product. When four pints of highly nutritious milk is selling for less than a bottle of water then there is something wrong in the culture of society.”
David Handley, of Farmers for Action, said government, retailers and the food service industry have to “step up to the plate” to tackle the crisis.
He said: “There’s a letter going out to all the retailers and I would say to government and the food service industry they all have to step up to the plate. I don’t think there’s any farmer out there that will accept they can just sit back on their laurels.
“Peaceful protest has worked well so far, I think that will carry on until we can actually deliver something.”
Arla, which is the UK’s biggest dairy co-operative and is owned by 13,500 farmers, has recently made a price cut of 0.8p per litre, taking the standard litre price to 23.01p for its UK members.
With production costs estimated at up to 32p, farmers are losing almost 10p per litre.
A survey of milk drinkers found they would be willing to pay £1.28 for four pints of milk. Supermarket prices currently range from 89p to £1.
Following yesterday’s summit, Scotland’s secretary for rural affairs, food and the environment called for widespread support of the dairy industry.
Richard Lochhead said: “I am calling on retailers and other buyers to get behind the dairy sector in this time of need and to pay a fair price for milk. I fully recognise the difficulties being faced by dairy farmers because of the low price being paid for milk and volatility on the global market, and I have written to my UK counterparts calling for a joint ministerial meeting on this issue.
“I am also happy to meet again with the dairy sector at any time and in any place during these very difficult times.”
A spokeswoman for the UK Department for Environment, Food and Rural Affairs (Defra) said: “We maintain a regular dialogue with farming unions and industry. We look forward to discussing these issues with them further.”
A British Retail Consortium spokesman said: “There is no connection between the price of milk in supermarkets and the price retailers pay farmers for their milk.
“The retail industry pays a fair price with individual retailers using different payment models. We understand the current frustration of farmers but it is wrong to blame retailers.”