The UK milk ‘crisis’ – fact or fiction?

Reading the UK press over the past few weeks it appears that the UK dairy industry is on its last legs and that UK dairying will soon become an extinct species. The Daily Mail reports that “campaigners warned it was the worst crisis the industry has ever seen”. At the other end of the political spectrum, the Guardian headlines its story “No whey forward – future of Britain’s dairy industry hangs in the balance” and goes on to claim “Years of falling milk prices could spell an end to the fresh, safely produced dairy products we take for granted.”
According to Rob Harrison, the chairman of the NFU’s dairy board, in The Telegraph: “Being a dairy farmer at the moment is like being a boxer – on the ropes and taking body blow after body blow.

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Why the poor EU response to higher grain prices?

Since 2007/08, the world has lived with substantially higher, if fluctuating, prices for grains following the global food price spike that began in 2007. Economists would predict that higher prices would lead to a global supply response. Indeed, global cereals production has increased by over 500 million tonnes in 2013 compared to 2006 production of just over 2 billion tonnes (FAOSTAT statistics are used throughout this post, and cereals production is measured inclusive of the volume of milled rice). This corresponds to an increase of 25% over this period, or a compound annual growth rate of 3.3% per annum which is impressive.

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