The closure of restaurants, cafes and canteens has hit demand for milk. Some 10 million litres of milk would normally enter the food service industry. Retailers are absorbing about half of that, with consumer stockpiling cushioning the impact at the beginning of the lockdown.
However, there is now a surplus of 5 million litres out of a total daily output of around 35 million litres after people stopped buying milky coffees and other dairy products they would normally consume away from home.
As a consequence some farmers are dumping milk after processors halted collections. Spot wholesale milk prices have fallen from 20p a litre to 15p during the week. The National Farmers Union estimates that 2,000 dairy farmers are under severe financial pressure.
Dairy farmers are asking for state aid. It is unclear what form that would take, although the NFU has made some suggestions, including cash grants of up to £25,000 under the Retail and Hospitality Grant Scheme: Saving iconic sector
The NFU has sought a meeting with the Defra secretary, George Eustice.
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