Jim Begg, director general of Dairy UK said: “For example, the processing sector has been subject to a sustained increase in costs over the past year. Energy costs have risen by a minimum of 10% which at the very least will add around £5 million to industry costs on an annualised basis.”
Begg went on to note that wage costs have also risen and packaging costs on liquid milk have risen by £15 million.
“Producers have been badly affected by costs increases,” said Begg. These increases also include a rise in the cost of fertilisers and diesel and feed prices, he noted.
“These cost increases are clearly a challenge to the industry and they will have to be met through efficiency gains and revenue from the market,” he said.