"There is no 'over supply' driving down prices, that is happening because farmers are being paid 2/3 of the cost of what it costs to provide milk and the middlemen and shops are pocketing the profit."
But how can they drive prices down if there is no surplus? The supermarkets have to compete with each other, not only for customers, but also for supplies, if there was a shortage prices would go up. It's been mentioned numerous times when the story is covered that there is a milk surplus.
"From what I've read the large-scale 'factory farms' are trying to reduce farming overheads in an attempt to stay in the market."
Yes, and the way they do that is by the economies of scale, thereby increasing the supply, reducing prices, and driving the smaller less efficient producers out of business.
"Crun - how come milk is such a big proportion of your shopping? Could it be that you need to use so much more because it's so watery?!"
What do you call a lot of milk? I use 130l/year, which is only 356cc/day, less than 2/3 of a pint. Watery?