Don’t Milk the producer

Don’t Milk the producer

What strange times we live in. Lots of talk about inflation and interest rates going through the roof.

Men’s suits were recently withdrawn from the “inflation shopping basket”. (Good old Covid!). I was interested to learn that men's suits had been in the basket since 1947. “Working from home” has a lot to answer for. However, suits are not what you would call an everyday purchase.

Food on the other hand, is, and I suspect food cost inflation is likely to be higher than the headline rate. Despite this, I recently asked a friend at a social event how much he paid for a litre of milk. He explained that he bought it in 4 litre containers and it was about 30p a litre. I then went on to explain it was about 30p a pint as he was buying 4 pints at a time.

Supermarkets are renowned for passing on price cuts to the producer. My friend realistically had no idea how much he was paying for milk, when he needed it he bought it. It should be noted, that Agricultural input costs are running at an inflation rate in excess of 25%.

Whilst the milk price paid to the producer has increased, it is still likely in many cases to be below the price needed to make a profit. So come on Mr Tesco….. Keep the price rise going!

Don’t Milk the producer dry.

How can Haines Watts help?

We advise clients with a Rural and Agricultural services throughout the South West.

If you would like to have a conversation to see if our partners can advise you about getting organised ahead of time or with regards to a paticular situation, please get in touch with your usual Haines Watts contact.