EU may have to import milk if supermarkets don’t cut prices

EU shop prices for milk jumped 17% from mid-2007 to mid-2008, and have fallen back only 2% since – even though the milk price paid to farmers has halved.

Supermarkets were put on the spot after this week’s meeting of EU farm ministers, by Agriculture Commissioner Mariann Fischer Boel, who warned that the EU may end up short of fresh milk, and would have to import it if retailers don’t find a solution. “You should have a steeper drop in consumer prices than just 2%,” she warned.

In the past, she has complained that retailers make consumers pay dearly for staple foods like bread and milk, when world grain and dairy prices are high, but are slow to pass on savings when markets retreat.