How much does milk cost? UK dairy product prices could…

How much does milk cost? UK dairy product prices could rise more, warns leading dairy producer

How much is the price of a pint of milk?

Politicians are often asked this cheeky question in interviews, supposedly to test their knowledge of the real world. But these days, thanks to inflation, the answer is constantly changing.

And this is going to continue as the UK’s largest dairy cooperative has warned there could be further increases in prices if the Government doesn’t step in soon.

Arla, the leading dairy producer, said the price of milk and other dairy products such as cheese, could continue to rise if the Government does not urgently tackle labour shortages in farming.

A lack of workers is “fuelling food price inflation”, they have warned, which will in turn have a knock-on effect on milk production lines.

Figures from the Office for National Statistics showed the price of dairy products rising steeply in May, with skimmed and semi-skimmed milk climbing by 28.5 percent in a year, butter by 14.1 per cent and the price of cheese and curd increasing by 33.4 per cent.

Arla’s Paul Savage said: “We are at serious risk of continued food price inflation and longer-term food security issues if we don’t tackle this now.”

Supermarkets have done what they can in recent months to make milk affordable but it is feared it could soon become out of their hands as production prices climb.

In April, Tesco became the first supermarket to cut the price of its milk, reducing its four-pint bottle from £1.65 to £1.55.

Aldi, Lidl, Asda and Sainsbury’s joined Tesco in cutting the price of milk by at least 5p.

Here is how milk prices have changed across most supermarkets:

One pint: from 95p to 90p
Two pints: from £1.30 to £1.25
Four pints: from £1.65 to £1.55

Here’s what you need to know about the price of milk.

Why have milk prices been rising?

Oil and gas have been in greater demand as life returned to normal post-Covid, and then the war in Ukraine affected supply from Russia, putting further pressure on prices.

However, the rate at which food prices are going up is slowing. In the year to May 2023 food and non-alcoholic drink prices went up by 18.4 percent. In the year to April they went up by 19.1 per cent. Over March and April annual inflation rates for food and non-alcoholic drinks increased by the most in more than 45 years.

[There’s] some light at the end of the inflationary tunnel for consumers

Laith Khalaf, head of investment analysis at AJ Bell

Milk itself has risen by 43 per cent on average from February 2022 to February this year, alongside other staples, such as cheese and eggs, which have surged in cost and squeezed household budgets.

Speaking to the BBC, Jason Tarry, Tesco’s UK and Ireland boss, said the supermarket’s cuts to milk prices would “not affect” the price it pays to its farmers.

“We’ve seen some cost-price deflation for milk across the market in recent times and we want to take this opportunity to pass that reduction on to customers,” he said.

How much does milk cost?

Laith Khalaf, head of investment analysis at AJ Bell, told the BBC that, while the cut in price was only to a single product, the decision by Tesco was “some light at the end of the inflationary tunnel for consumers”.

“It also suggests that the UK’s fiercely competitive supermarket sector isn’t simply going to cash in on profits as wholesale costs fall, because there’s always a competitor waiting in the wings to do some undercutting,” he added.

Here’s the current price of a four-pint bottle of milk in all the major supermarkets.