Sir, In your recent dairy supplement (July 1) you state that when Asda (closely followed by the other multiples) cut the price of a four pint polybottle of milk from 89p to 83p it took a cut in margin. Once upon a time, 89p was a loss leader price, but over the last four years the producer price for that amount of milk has been cut by 20p as the dairies exploit the IMPE to buy our milk at an artificially low price, which does not reflect the market as a whole. Supermarkets now make a profit retailing a 4 pint polybottle at 6p less than that previous loss leader price. Before their price cut, they claimed not to be profiteering as they had incurred extra costs. The dairies also claimed increased transport and packaging costs. Those costs should have been passed on to the consumer, not an excuse for paying producers less. Cheap milk still undercuts doorstep deliveries and gets the punters into the aisles, but at producers' loss of at least 9p per four pint polybottle. After paying for transport to the dairies, the typical producer price as stated in your supplement is 16p/litre, but the production costs are at least 20p and that is without the producer being paid for his typical 75 hour week or re-investment in the business. That comes out of profits. A reasonably large herd of 100 cows producing 2,000 ltres daily is losing £80 a day. Producing milk at a loss is not sustainable. No wonder so many producers are leaving the industry. It is not simply a matter of expanding or getting out, expansion needs more cows, land, quota, housing and handling facilities. We have neither the capital nor the confidence. Dairy farmer Cumbria {{LETTERS }}