Dairy prices to soar further, price-rise is ‘here to stay’

Britain’s biggest dairy producer has declared that the price of milk will continue to rise due to spiked energy costs that have already risen by 200 percent, stated recent reports.

Arla Foods’ chief commercial officer Peter Giortz-Carlson told Sky News that input costs, driven higher by the war in Ukraine, will have to be passed on to customers and increased prices were here to stay. Arla Foods is a co-operative owned by some 2,300 British farmers in the UK alone.

Noting that packaging and feed costs have increased by as much as 40 percent, Giortz-Carlson added that, in his 20 years in the industry, he had “never seen anything like it” and doesn’t think the industry has “seen the top yet” on food price increases.

Despite the price rise, Giortz-Carlson revealed that milk farmers were still making a loss due to the rising costs of fertiliser, feed and energy.

He warned milk supplies could be impacted as the income being received by farmers “cannot cover the costs” they currently have to keep running their farms.

Arla Foods boss also admitted that supply is increasingly coming under pressure.

Arla Foods’ “main job here is to keep the products flowing, and make sure that there is a supply of food on the shelves,” he said.

Giortz-Carlson said increased prices were here to stay for some time yet as the food industry relied partly on Ukraine for animal feed. Due to the ongoing conflict, only 50 percent of the usual level of feed is expected to be exported from Ukraine and there was uncertainty around what the country’s harvest will produce due to the impact from the war with Russia.

He also raised fears about the rising price of fertiliser – as well as its availability – and said “this is a very tough storm that we’re in and it’s across from all sides and our role in this is to keep the products flowing”.

The statement comes after ONS revealed this week that CPI inflation rate has hit 9 percent. Forecasters warned that figure will even be higher by the end of the year.