Milk, dairy product prices will keep rising unless staff shortage eases: Arla

There could be further increases in the price of milk and other dairy products, a UK’s largest dairy cooperative has warned, calling on the government to urgently tackle labour shortages in farming by bringing more people into food and agriculture.

Arla today (22) unveiled a four-point plan to help the government address the labour shortage in agriculture. The call on government, which includes setting out clearer pathways into farming via apprenticeships, highlights that the industry labour shortage is fuelling food price inflation and could well lead to a crisis in milk production, if it is not addressed as a matter of urgency.

A survey of Arla’s farmer owners found that almost three-fifths (57.7 per cent) are finding it harder to find staff compared to 2019, before the pandemic and the end of free movement of people to and from the EU.

Arla research shows that young people have a limited understanding of what modern farming involves, and the fact that more than half (54.8 per cent) of farmers say that few or no applicants for jobs right now have the right skills demonstrates there’s an acute need to educate, inform and upskill in this area.

Revealing a four-point plan to help the government address the labour shortage in agriculture, Paul Savage, director of agriculture for Arla, commented that the last twelve months have been incredibly challenging for our farmer owners, as events like the war in Ukraine have driven up the cost of producing milk to levels we have never seen before.

"The shortage of staff in the food and farming sector has compounded this and we are at serious risk of continued food price inflation and longer-term food security issues if we don’t tackle this now."

About 12 per cent of farmers were considering quitting dairy production altogether because of the challenge of finding workers, Arla stated, adding that others said labour shortages might cause them to reduce their milk output or cut the size of their herd.

Problems finding labour have already prompted farmers to raise pay for farm workers, leading to higher wage bills. The 600 farmers surveyed by Arla in March said that on average they had increased pay for their workers by 22 per cent since 2019. The majority (60 per cent) of dairy producers said they expected wage pressure to continue for the next year, which would continue to have an impact on food prices.

“That’s why we have started a campaign to highlight how farming has changed. We have also begun to signpost our farmers towards advice from the Institute for Agriculture and Horticulture. Arla will be doing a lot more, and we need the Government to join in via a public marketing campaign celebrating agricultural careers as well as improved career advice in schools and Job Centres.”

Arla's report comes as figures from the Office for National Statistics (ONS) showed the price of dairy products rising steeply in May, with low-fat milk climbing by 28.5 per cent in a year, butter by 14.1 per cent and the price of cheese and curd increasing by 33.4 per cent.