Farmers' warning as milk prices fall below cost

An important development from the financial markets: Farmers' warning as milk prices fall below cost1 hour ago Share Save Add as preferred on GoogleDave HarveyWest of England business and environment correspondentBBCSeth and Oscar Yates both want to work in farming after college, but worry the low price of milk will make it impossibleDairy farmers say they are being paid far below the cost of production, raising fears for the next generation who want to follow them into the industry. Industry figures show farmers are paid 32–35p a litre, while production costs can reach nearly 42-49p. "If we don't sort out the milk price pretty quickly, there'll be no industry left," says Ben Yates from Frome, Somerset.

Both his sons want to follow him into farming but unless the gap between what they are paid for the milk and what it costs to produce is reduced, Yates warns "there will be no future in this industry". "It's terrifying," said Tom Kimber, a 10th generation dairy farmer. "It just cannot be done much longer like this.

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"Every day Seth and his brother tend to their calves which they will enter at the Royal Bath and West ShowStraight after school, Seth and Oscar head to the young stock sheds on the farm their dad Ben Yates manages, south of Frome. Oscar has spent the day remembering his Shakespeare, for an English Literature GCSE. But while his mates relax, he and his brother muck out the prize calves they are preparing for the Royal Bath & West Show.

More from SomersetHospital hat badges 'help put patients at ease'Fresh probe into antisemitic posts by former mayorAir Ambulance charity seeks opinion on new base"This one's already a champion," smiles Seth, walking a young white Holstein calf on the halter. 'Blaze' won her class at the North Somerset show, so Seth has "high expectations" at the bigger regional competition. Oscar was given his calf for his 16th birthday.

Farming, he says, is "part of who I am". Both want to follow their dad into a farming career. They understand the challenges of a changing climate and how hard it is to make money, "but that doesn't take away from how nice it is to work with the animals round the farm," insists Seth.

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Yates says milk prices are not movingBut their dad worries that it is becoming impossible to earn a living out of milk. Simply put, the average UK dairy farm loses 10p on every litre of milk they sell at the moment meaning it costs significantly more to produce milk than supermarkets are paying. Yates says: "If we don't sort out the milk price pretty quickly, there'll be no industry left.

"We've got to have the future. We've got to make farming and milk production attractive so that people want to come and be in it, build it. "Already, he says, farmers are selling up.

"You drive around the roads and you see empty dairy farms. And once you stop dairy farming you don't get back into it," he added. Industry figures bear out his observations.

Economists are analysing what the news means for the markets.