AN AGRICULTURE leader has warned consumers to expect higher milk prices as East Lancashire’s dairy farmers grapple with increased feed costs and ruthless wholesalers.

Andrew Rothwell, the National Farmers’ Union secretary in East Lancashire, said it was ‘unrealistic’ to expect milk prices to remain untouched while the cost of other food and drink items soar.

Mr Rothwell believes milk wholesalers already pay dairy farmers too little for their produce.

Farmers should be offered at least 32p a litre but many supermarket suppliers offer as little as 26p, he said.

Mr Rothwell added: “I think supermarkets and other retailers will fight tooth and nail to keep milk prices down but it is unrealistic to expect them not to go up.

“The price now is an unrealistic one, it is not a true reflection of how much it costs to produce.

“We cannot just hold the price down and pretend that is how much it costs.”

NFU bosses have spent years arguing that the milk prices offered to dairy farmers must increase, with supermarkets reluctant to concede ground to rivals in price wars.

But the industry now faces a ‘perfect storm’, as attempts to keep production costs down are allied to rising cattle feed prices and inflation.

The result, said Mr Rothwell, is that margins are being squeezed, leaving dairy farmers less cash to invest.

He added: “Milk is a loss-leading item and you don’t get that with almost any other product.

“We have seen three big dairy farms in East Lancashire go out of business in the past year and the ones that are surviving cannot afford to spend any money on their infrastructure because of the prices.”

But Mr Rothwell added that even if supermarkets decide to raise prices, there was ‘no guarantee’ the revenue would trickle down to farmers.

Instead, retailers and wholesalers like Robert Wiseman, Arla and Dairy Crest may reap the rewards.