UK Edition
Britain is on the edge of dairy shortages as a crippling lack of workers forces farmers to slash production, the country's biggest milk and butter maker has warned.
Arla Foods, the company behind Lurpak butter and Cravendale milk, also predicted that dairy prices will surge even higher with grocery bills already rising at the fastest pace in 13 years.
Ash Amirahmadi, UK managing director at Arla, said that British milk production is already down 3pc in 2022 after more than seven years of growth.
He added: “If that 3pc gets to 5pc, we know that will lead to shortages, in terms of [meaning] we can’t meet the demand that’s there.”
Farmers are being squeezed by soaring fuel, animal feed and fertiliser costs while worker shortages are also hitting the industry.
Mr Amirahmadi said “we’re on the edge” of dairy shortages and warned there is “more inflation to come”.
He added that the company – a co-operative owned by 12,000 farmers, around 2,500 of them in the UK – is in talks with ministers to obtain feed, fertiliser and fuel.
Mr Amirahmadi said: “The work with Government is less about inflation, but it's more about making sure that the product keeps flowing."
Arla is facing shortages of farmers, logistics roles such as drivers and skilled labourers in its factories.
A survey by the dairy cooperative found that staff shortfalls have forced around one in 10 of its members to cut milking or consider doing so, and 13pc to reduce their herd size or consider a drop.
Some 61pc are finding it more difficult to recruit than in 2019 and 12pc claim they plan to leave farming in the next year if the situation does not improve.
Arla urged ministers to take action, including creating a cross-department strategy to boost the supply of young workers and relaxing immigration rules for some roles.
A Government spokesman said: “Labour shortages are affecting countries around the world.
"As announced in the Government Food Strategy, plan to commission an independent review into labour shortages in the coming weeks.”
The spokesman urged the dairy industry to “make long term investments in the UK’s domestic workforce instead of relying on labour from abroad.”
He said: “We are working with industry to raise awareness among UK workers of the opportunities in these sectors."
Rocketing costs and staff shortages are helping to fuel dairy price rises and wider food cost inflation, which has hit a 13-year high of 8.5pc.
Milk and butter prices have soared by more than 10pc in the last 12 months. Lurpak is being security tagged in Asda to prevent theft, and the cost of a 500g tub of butter has hit £6 in some shops.
Low fat milk prices are up 19pc, whole milk has jumped 15pc and the cost of butter has increased 13pc, according to the Office for National Statistics.
Vladimir Putin’s invasion of Ukraine has caused global food prices to soar to record highs, stoking fears of shortages that spark social unrest in parts of the developing world.
The war slashed production of wheat in Ukraine, which is known as the “breadbasket of Europe”, and has pushed up costs for farmers worldwide through higher energy and fertiliser costs. Russia has been accused of weaponising global food supply by stopping grains from being exported from Ukraine.