Lancashire dairy farmer warns farming industry cannot pay for cost of living crisis

Video report by Granada Reports' journalist Emma Sweeney

An award-winning dairy farmer from Lancashire has warned that farmers could walk away from the industry if rising production costs are not met by retailers.

Ian Pye has cited the on-going war in Ukraine as one of the reasons why fuel and animal feed have become more expensive - and although retailers have helped to cover those rising costs for dairy farmers, Mr Pye says many are worried this won't continue into the future:

''Farmers are genuinely worried that farmers are going to have to stump up for this cost of living crisis and that the pressure from the supermarkets is going to become that they push our prices down - but that's not sustainable.

''All our input prices are just plateauing, they're not coming down...

''Our prices that we receive at the supermarket have to stay as they are, they can't come down.

''If anybody thinks that they are, they will see empty shelves.''

Mr Pye was speaking on a day when the latest ONS figures showed how food prices are rising at their fastest rate for 45 years.

According to the data, the rate of inflation across food and non-alcoholic drinks hit 16.4% in October - the highest since September 1977.

Families were hit by soaring costs of staple foods, such as milk, cheese and eggs, while there were also hefty hikes across everyday items such as sugar, tomato ketchup and jam.

Customers were also hit with rising gas and electricity prices.

Chancellor Jeremy Hunt blamed the impact of the pandemic and Vladimir Putin’s war in Ukraine for the spike in prices, as he warned that "tough" decisions on tax and spending would be needed in Thursday’s autumn statement.

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"The aftershock of Covid and Putin’s invasion of Ukraine is driving up inflation in the UK and around the world,” he said.

"This insidious tax is eating into pay cheques, household budgets and savings, while thwarting any chance of long-term economic growth.

"It is our duty to help the Bank of England in their mission to return inflation to target by acting responsibly with the nation’s finances. That requires some tough but necessary decisions on tax and spending to help balance the books."

Meanwhile, poultry farmers across the North West are also facing tough challenges as the UK faces its largest ever bout of bird flu, with a highly pathogenic variant circulating.

Since early November, bird keepers have had to keep their animals housed and away from wildlife to reduce the spread. When there is a confirmed outbreak on a poultry or egg farm, all the birds in the affected area are destroyed, meaning fewer eggs in the supply chain.

The outbreak is compounding existing shortages caused by producers cutting back on output or leaving the industry due to increased costs, with Russia’s invasion of Ukraine driving up farmers’ energy bills along with the cost of chicken feed, hens and packaging.