Gap between farmgate and retail milk price continues to grow.

Dairy industry, DairyCo, have produced their annual Dairy Supply Chain Margins report and have concluded that the margins achieved on milk and dairy products by supermarkets have increased while milk producers' margins have fallen.  The report claims that producers continue to receive a milk price well below the true cost of production.

The report looks at gross margins made by farmers, processors and supermarkets from the sale of fresh milk, milk cheddar and mature cheddar, suggests processors are not faring much better either.  In the year ending March 2010 supermarkets managed to increase their margins on all three dairy products despite only marginal changes in the retail proces being charged to consumers.

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