Got a tricky question? Receive an answer from students like you! Try us!

An Economic Analysis of UK Milk Industry - Essay Example

Only on StudentShare
Pages 3 (753 words)


The UK is the 10th largest milk producer in the world and the 3rd largest in Europe. Dairy Farming in the UK is a semi-intensive livestock industry which accounts for around 19% of UK agricultural production by value and is the single largest agricultural sector at 2.7 billion…

Extract of sample
An Economic Analysis of UK Milk Industry

Figure 1 shows the pattern of farm gate prices:
In 2004-2005, UK still remained as the lowest farm gate priced dairy producer for the 7th consecutive year. Comparing prices, the UK has a 37% gap as compared to Italy who receive a milk price of 35.8 euros/100kg compared to UK at 25.9.
The reasons that were deemed to have caused this low farm gate price are the industries poor selling systems, bad forward contracts, excess profits up the dairy food chain, too much spring milk and currency effect or the / Euro relationship.
However, even with the loss of farmers, the UK milk and dairy industry has grown gradually but steadily since 1998 and the total value of the market increased by 2.9% to 7.23bn in 2002 (DEFRA, 2006b).Why then in spite of the loss of producers, is the industry thriving
A September 2005 report by the Milk Development Council revealed that there was a discrepancy between the profits received by sectors of the supply chain. That is, some of them are earning excessive profits at the expense of the others. The report showed that supermarket, retail and processor gross margins on dairy products have increased over the past 10 years. Farm gate prices were also higher on average during 2004 as compared to 2003 but this increase was minimal as can be seen by the figure below:
The problem now becomes apparent. ...
Download paper
Not exactly what you need?

Related Essays

There are various types of microorganisms that can be found in milk and related products depending on the hygiene standards followed.…
15 pages (3765 words)
Economic Performance of UK
UK's economy is experiencing slower growth as during 2007, it recorded a real GDP growth of 3.1% however, and the same has been recorded at 1.0% due to sharp increase in inflation. ( 2008). UK's inflation touched 3.8% in 2008 whereas its budget balance also widened to negative 3.8% suggesting the fact that all is not well for the UK economy.…
6 pages (1506 words)
The UK construction industry .
The UK construction industry has witnessed a fall of nearly two percent in construction activity during 2010 compared with last year's 12 per cent drop and is expected to remain in recession. It is estimated that by the end of 2010, construction industry will have lost 16 billion of work in just three years and the growth is not expected to return until 2011 and even then it is forecasted to be relatively subdued at just one per cent per year in the consecutive three years coming. An interesting factor to be observed here is regarding the private Vs public construction companies' progress.…
6 pages (1506 words)