Soaring milk prices – who will benefit?

The milk price has risen so high that even the EU has scrapped its export subsidies. Simon Wilson looks at why consumers will be paying more for cheese this summer - and who's actually making money from milk these days.

What has the EU done?

At a meeting last week, the EU Commission's dairy management committee decided to cut the export subsidies it pays on milk products such as butter and skimmed milk powder to zero. It's the first time this has happened in the 40-year history of the so-called Common Agricultural Policy a protectionist scheme that uses taxpayers' money to support Europe's farmers. Ever since the mid-1960s, the EU has fixed support prices for dairy products at well above the going rate on the world market, inevitably leading to over-production. That protection resulted in the so-called butter mountain, as well as milk quotas and, more recently, the dairy-cow premium (which is now part of the Single Payment subsidy to farmers).

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Simon Wilson’s first career was in book publishing, as an economics editor at Routledge, and as a publisher of non-fiction at Random House, specialising in popular business and management books. While there, he published Customers.com, a bestselling classic of the early days of e-commerce, and The Money or Your Life: Reuniting Work and Joy, an inspirational book that helped inspire its publisher towards a post-corporate, portfolio life.   

Since 2001, he has been a writer for MoneyWeek, a financial copywriter, and a long-time contributing editor at The Week. Simon also works as an actor and corporate trainer; current and past clients include investment banks, the Bank of England, the UK government, several Magic Circle law firms and all of the Big Four accountancy firms. He has a degree in languages (German and Spanish) and social and political sciences from the University of Cambridge.