With consumers experiencing inflation in the prices of various products at supermarkets, the dairy industry is also affected as the remuneration farmers receive for their milk has fallen steadily since last summer.
One farmer from Walloon Brabant told RTBF reporters that they receive only 40 cents (€0.40) per litre of milk, while discounted milk is still sold at around €1 per litre in supermarkets. This represents a 30% decrease compared to last September. Despite milking 78 cows and producing an average of 2000 litres of milk per day, the farmer revealed that overall revenue has fallen significantly.
Yet the price of milk on supermarket shelves has actually increased: according to Test Achats, there has been a 29% price hike between May 2022 and May 2023. This increase can be attributed to rising production costs, including inflation in packaging materials and transportation expenses. But it doesn't seem to be translating to a better deal for farmers.
Labour costs have also surged due to the indexation of historically high wages, which further answers for the price surge. But in the dairy industry, these costs are spread along the production chain, so it takes time for them to be reflected in the final product price.
The discrepancy between farm and store prices is a well-known mechanism, although some are closely monitoring it. A spokesperson for Test Achats emphasised the need for these mechanisms to adjust fairly for the discrepancies so that inflation doesn't just end up leading to bigger profit margins on the final product.
