Consumers may have to pay more for their milk along with others in the supply chain, to resolve a crisis which sees up to 85 per cent of dairy farmers making a loss on production.

With milk prices severely reduced, the average dairy farm will lose £150,000 of income, from milk sales this year. So NFU Scotland and the Scottish Government are in urgent talks to find a way forward in an attempt to save the sector from a pricing regime which has seen a dramatic drop in the money farmers receive.

In 2014 most were receiving around 32p a litre, now it is an average of 20p. However some farmers who are selling to buyers south of border through a co-operative, can get as little as 12p a litre when transport costs are taken deducted.

According to George Jamieson, NFU Scotland's Milk Policy Manager, those farmers who have liquid ‘aligned contracts’ with supermarket chains such as Tesco, still enjoy prices of 30p a litre. “But they only represent 15 per cent of the producers in Scotland. The vast majority are struggling to keep going, receiving prices that can be less than 20p, some as little as 12p.

“We had thee peaks and three troughs since 2007. But for the farmers this has been the most extreme, going from 32p to well under 20p, and even 12p in the space of a year .The most worrying aspect about this current crisis is not just extent of that drop, but the duration. It started in 2014 and analysts are telling us we are unlikely to be out of it in 2017. That would be three years of declining or flat prices.”

He said there were urgent talks with the Scottish Government to look for solutions.

“The average dairy farm will spend £436,000 a year. So with around a 10p a litre reduction, the average loss in income, for a dairy farmer this year could be £150,000. But despite this the long term prognosis for dairy is still positive. So we have got to get them through this, especially those who are good at their job and want to carry on.”

NFU Scotland representatives are in urgent talks with the Scottish Government and others to look for solutions. One of the things being examined was how to make the whole supply chain bear the brunt of the downturn, and not just the farmer.

“That is the the farmer, the processor, to retailer (supermarkets / other end users) and the consumer, who has been protected from the current difficulties. Many people come into a supermarket to buy milk with a price that had been kept low, but buy other more expensive items when they are there.”

He said that the public had already shown they were willing to support paying more for the farmers’ premium milk which Morrisons had introduced. He believed that showed a reservoir of goodwill on which to build.

He said it was important to understand that this crisis was not just about dairy farmers producing too much milk. It was the result of turbulence in the whole global dairy sector, in which Russia, China and New Zealand played as important role as the dairy farms say in Ayrshire.

In the meantime Scottish dairy farmers were being advised to "reduce production in a rational and well considered way."

It is a similar picture in Northern Ireland where the Fair Price Farming NI group has warned local dairy farmers that if supply does not fall soon, more farmers will fail.

Milk prices are currently around the 16-18p per litre depending on the buyers. But the group says the price is about to fall to 12 pence per litre which could signal the end for many of the region's farm businesses.