The head of the UK's largest dairy said there could be supply problems from next month
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A shopper looking at milk in a supermarket (file image) (Image: Daily Mirror)

The head of the UK’s largest dairy has warned shops could run out of milk as dairy farmers face soaring bills. Dairy farmers are facing a huge rise in costs for everything from animal feed and fertiliser to diesel.

There is now concern they will redirect milk from shops to other markets, potentially leading to a shortage in stores, the Mirror reports. Ash Amirahmadi, the UK boss of Arla Foods, the country’s largest dairy, said it would depend on whether retailers could “stump up what is required”.

He said: “All the data I am looking at ways we are likely to have supply problems in May or June of this year. If retailers are willing to stump up what’s required, we won’t have supply issues.”

According to the Mirror, figures from the comparison website Trolley.co.uk show that across 116 different milk products in February, the average price had risen to £1.43, up 9p from September. A two-litre bottle of Cravendale filtered semi-skimmed milk has jumped by 22p, or 12.6%, to an average of £1.97 in the past year, it said.

Prices have been increasing due to the increased cost of milk production, including feeding cattle which has been driven up by an increase in the cost of fertiliser. This in turn has risen due to gas prices going up, all exacerbated by the crisis in Ukraine.

Dairy farmers have also faced rising labour costs and machinery prices. Dairy industry consultancy Kite Consulting warned in November that this “inflationary pressure can only be addressed by passing costs on to consumers through a re-basing of ‘normal’ retail prices for milk, cheese and butter”.

It said at the time: “Without this, we believe that milk production will fall, and UK dairy production may increasingly be diverted to serving export markets rather than low margin retail and foodservice markets in the UK.”

Fonterra has completed a revamp of its executive management team with the appointment of Emma Parsons in the new role of managing director strategy and optimisation.

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