Question to the Department for Environment, Food and Rural Affairs:

To ask Her Majesty's Government what assessment they have made on the impact of supply chain inflation on the English dairy sector’s productive capacity.

The supply chain inflation seen in the dairy sector in recent months, driven significantly by increased global gas prices, Russia's invasion of Ukraine and the consequential increase in costs for feed, fuel and fertilisers has created challenges across our dairy and wider food and farming sectors.

It is too early to understand the impact of increased input costs on the longer-term productive capacity of the dairy sector. While farmers have recently seen a substantial increase in the farm gate milk price that they receive, helping them to offset their increased input costs and to maintain production, we are aware that input cost pressures are leading to a period of significant uncertainty and adjustment across the sector.

The sector operates in an open market and the value of dairy commodities, including the farm gate milk price, is established by those in the supply chain - including farmers, processors, wholesalers, retailers and consumers. Defra will continue to work closely with industry to monitor and understand evolving market developments, including dairy production trends.