London will face a shortage of liquid milk if raw milk prices keep falling and transport costs continue to rise.
Industry sources have warned that it could be more profitable to put milk into ingredients processing facilities in the south west than to take it up to 300 miles from Devon and Cornwall into the capital. These two counties, which together produce 1.46 billion litres of quota, are key to London’s raw milk supply. “If the margin closes, the liquid market will have to react to secure supplies,” said a senior source at Milk Link, the co-op which collects 65% of the milk in the south west.