The Guernsey Dairy will charge wholesalers 4% more from July, meaning a litre in the shops could cost around £2.

It is the wholesalers decision whether to pass on the increase to customers, but this is generally what happens.

A litre of Guernsey milk currently costs around £1.85

The Dairy last increased its wholesale price in January 2024, by 6%. Meaning there will be a 10% rise in 6 months.

It could cost £2 for a litre milk in some shops.

The Dairy says a number of factors are impacting milk prices - such as increased pay for local farmers, its ageing equipment which requires costly maintenance and supply chain volatility, due to Brexit and the war in Ukraine.

Dairy Management Board chairman, Mark Thompson, highlighted the reduced financial support from the government as a main factor.

He says, although the Board is conscious of the impact of rising prices on islanders, the Dairy has to rely more on income from milk sales.

“The States does provide direct financial support for local dairy farmers, in recognition of the important role they have in managing the countryside and maintaining the Guernsey breed.

Government also provided emergency support, following the outbreak of the war in Ukraine, to help offset the sudden rise in the cost of animal feed, fertiliser, and other essentials.

However, the baseline funding which the industry receives has significantly reduced, and continues to be eroded each year by the impact of inflation.

In 2000, that financial support was £2 million, which in real terms would be equivalent to around £4 million in 2024.

However, this year is just over £1 million.

The result is farmers are having to rely more on income from the milk the Guernsey Dairy purchases, and that is having to be passed on to consumers through the retail price.

Guernsey Dairy has also been impacted by other cost increases.

The ability to absorb these through efficiency savings is severely limited within the current facility, due to its age and condition, these too are unfortunately having to be passed on."

The Environment & Infrastructure Committee is reviewing local dairy farming, to identify a sustainable model and viable long-term plan for the industry.

Its proposals are expected to be debated by the States later this year.

Guernsey Dairy is forecast to make a trading loss of around £200,000 this year.