Milk! You know it's good for you

Farmers moan about it, supermarkets allegedly collude over it, and the world is said to be running short of it. And that's just a start. Simon Usborne untangles the mysteries of milk

The white stuff

This week's report by the Office of Fair Trading – which accuses Tesco, Sainsbury's, Morrisons and Asda of colluding, together with five dairy processors, to keep the price of dairy products artificially high – has thrown rare light on one of the great mysteries of our time: milk. Most of us have been aware for years that the retail price of milk has been creeping up; and, more vaguely, that the price received by dairy farmers for their milk has been going down – to the extent that many have gone out of business. Recently, however, there have been reports of the global milk shortage, and of a belated increase in the "farmgate" price of milk (the money farmers take). More recently still, there have been suggestions that dairy farming might in future become hugely profitable, with milk potentially becoming a biofuel.

It's all a bit confusing; and, with that in mind, this rough guide to the mysteries of milk attempts to clarify some of the key (and less key) issues.

The 'rip-off'

The Office of Fair Trading claims that, between 2002 and 2003, supermarkets ripped off consumers to the tune of £270m by colluding to add 3p to the cost of a pint of milk. Supermarket bosses deny any wrong-doing. Sainsbury's insists that its prices remained competitive and that any increases were passed back to producers. But Peter Ainsworth, a Conservative rural affairs spokesman, said: "Any suggestion that the retail price of milk was increased at the time to benefit farmers is nonsense."

If the supermarkets are found guilty, they could face fines of up to 10 per cent of their turnover on dairy products. Tesco's dairy turnover in 2002 and 2003 was estimated to be £1.7bn, and the possible £170m fine would dwarf the £121.5m paid out by British Airways last month after it admitted colluding with rivals to fix fuel surcharges.

The real price of a pint

The cost in stores of a litre of the white stuff has risen steadily from 42.7p in 2001 to an average this year of 56.3p. Over the same period, the "farmgate price" (the money farmers take) has fallen from 18.5p to 18.1p, dipping to a low in 2002 (which coincides with the period of alleged price fixing) of 15.3p.

But relative-value calculators suggest that the price of milk has in fact come down since 1980, when a pint cost 17p (the equivalent to 50p in 2006). On the other hand, the current price is more than double the average cost of milk between 1914 to 1970, when a litre would have set you back the equivalent of about 20p in today's money. (A pint of double cream has risen almost a quarter to £1.12 in the past year alone.)

The China effect

It used to be said that when America sneezed, the world caught a cold. In today's global economy, a lot of us are more worried about the health and wealth of China, where surging demand among the booming middle class has been blamed for putting up prices of everything from bicycles to garden fences. Milk is the latest commodity to feel the China effect. Germans have branded the Chinese "milk snatchers" for importing so much of the stuff that prices in Germany are expected to soar by 50 per cent. Traditionally thought to be lactose intolerant, the Chinese have developed a taste for dairy products in recent years. UN statistics show that China's consumption of milk has rocketed from 26 kilocalories per person per day in 2002 to 43 in 2005. The "dairification" of the people's republic owes a lot to a statement made last year by Chinese Premier Wen Jiabao. "I have a dream," he said, "to provide every Chinese, especially children, sufficient milk each day." For Britain's dairy farmers, the long-term effect ought to be healthy. Consumers might see it differently.

School milk

The Chinese milk programme recalls post-war Britain, when milk was provided by the state, at great expense, to all school children. That ended in 1971, when Education secretary Margaret Thatcher caused outrage by cancelling milks supplies children aged over seven. Harold Wilson's Labour government had stopped free milk for secondary school pupils in 1968.

Where does it come from?

According to a survey this year by Dairy Farmers of Britain, one British child in 20 doesn't know where milk comes from, and six per cent of British children aged between eight and 15 are not aware that milk is produced by farmers. An earlier survey suggested that one urban child in three thought that grass turned cows' milk green.

Where does it go?

Of the 14 billion litres of milk produced by UK dairy farmers every year, just under half is bottled. A quarter is used to make cheese, while cream, yoghurt and butter account for two per cent each. One per cent is wasted.

Milkmen

Once a familiar figure on doorsteps, milkmen are now a rare breed. A decade ago, more than 2.5 billion litres of milk were being delivered to the doorstep in battery-powered floats. By 2004 that figure had plummeted to 637 million. Today, less than 13 per cent of the milk consumed at home is delivered, while retailers' share of milk sales has risen from 55 per cent in 1995 to 86 per cent today.

Earlier this month, a Welsh milkman was honoured by his employer for more than 50 years' service. Chris Frankland, 68, began as a milk boy in 1949, making calls on his way to school.

Bottles

The first British glass milk bottles were produced in 1880 by the Express Dairy Company. Tetra Paks were introduced in 1964 and slowly supplanted bottles, before being overtaken in turn by plastic containers during the 1990s. Today 90 per cent of supermarket milk is sold in plastic containers. Waitrose has started selling milk in plastic pouches in an effort to reduce landfill and save the energy used in their manufacture. Currently only one in four plastic bottles is recycled.

The great cow of Cuba

White Udder, the cow turned Cuban propaganda tool, reportedly produced, on 23 June 1982, 110 litres of milk (four times the average yield), acknowledged by the Guinness Book of Records to be the highest reported milk yield in a day. She was seized upon by Fidel Castro, who appeared on state television stroking the cow, pointing out that no American animal could match her productivity. Castro commissioned a marble statue of the cow, which was also stuffed and put on permanent display at the National Cattle Health Centre near Havana. Cuban scientists attempted in 2002 to clone Ubre Blanca, but failed.

Yields

Since 1950, average dairy-herd sizes have risen from 17 cows to 106, while the cow population has dropped from 3.4 million to 2.1 million. On some dairy farms, as many as 700 cows are kept in hangar-sized sheds for seven months of the year and milked three times a day using automatic, self-cleaning machines capable of drawing 27 litres per cow per day, twice the average yield 10 years ago.

Health

A cup of semi-skimmed milk contains 285 mg of calcium, more than a quarter of the daily recommended intake for an adult. Milk also contains vital vitamins and linoleic acid, which some studies suggest could inhibit several types of cancer. Other studies have indicated that full-fat dairy products can improve fertility in would-be mothers.

Milk as fuel

New Zealand last month became the first country to produce a milk-based biofuel. Ninety per cent of the "Force 10" fuel is formed of oil; the rest is a bioethanol blend made from cow's milk. Dairy farm prices in the country are soaring on the expectation of a milk equivalent of an oil boom.

Beyond the cow

While staying at the five star Lanesborough Hotel in November last year, I'm a Celebrity star David Gest tested the hotel's kitchen by ordering a pint of Zebra milk from room service. When informed that the hotel stocked only cow, goat, sheep or soya milk, Gest reportedly ordered staff to ring London Zoo. Eventually the head butler tracked down some frozen zebra milk at £15 per pint. The milk of guinea pigs and whales is undrinkable for humans, due to its high fat content (about 50 per cent). Full-fat cow's milk is about 3.25 per cent.

Male lactation

Men are not only equipped with useless nipples, but with mammary glands too, and an increasing number are finding milk springing from their chests. The phenomenon is linked to increases in the use of medicines that stimulate mammary glands, including hormonal treatment for prostate cancer.

Balancing acts

The greatest distance walked by a person continuously balancing a milk bottle on their head is 80.96 miles by Ashrita Furman of New York, in 1998. In 2004, Ilker Yilmaz broke the world record for squirting milk from the eye. Yilmaz, who has an anomaly in his tear duct, projected the liquid 9.2ft. "I'm proud that I can get Turkey in the record book – even if it's for milk squirting," he said.

Additional reporting by Jamie Merrill

Top ten milk producers

* India 92m tonnes

* United States 80m

* China 32m

* Russia 31m

* Pakistan 30m

* Germany 28m

* France 26m

* Brazil 23m

* United Kingdom 15m

* New Zealand 15m

* World total 372m

2005 (UN figures)