FORMERLY known as United Milk, Westbury Dairies, on the Northacre Industrial Park, went into receivership in 2003 and was saved by a consortium formed of co-operatives Dairy Farmers of Britain, First Milk and Milk Link.

A break clause in the agreement meant that any of the three cooperatives could end the relationship after five years and although Dairy Farmers of Britain has decided to leave the consortium First Milk and Milk Link are staying put.

Denise Plumber is a partner at Manor Farm in Stanton St Quinton near Chippenham, which supply First Milk with milk. She said: "Our family believe that the cooperative stance is the best way forward because if farms consolidate they have more power.

"The only way we are going to manage is to get ourselves in to large groups so we wield more power.

"From our perspective the rise in costs have kept up with the increase in price but the problem is that there is no money for investment. We earn just enough to keep our heads out of water."

Susan Gray partner at W D Guley and Sons Farm in Berryfield Lane, Melksham told the Country Times: "According to the Milk and Dairy Council statistics the amount farmers receive for their milk has gone up by 8p a litre on average and the supermarket price has gone up by 12.7p a litre on average.

"We are on a contract with Sainsbury's for about 23p a litre but we haven't been making much of a profit for a long long time because all of our costs have gone up compared to last year.

"Feed prices are up by 35 per cent and tractor diesel is up by 90 per cent. Last year we were paying 36p a litre for tractor diesel and now it is 69p a litre.

"We did have the foresight to buy fertiliser early last year and we paid £148 a ton but now it's £300 a ton.

"Supermarkets need to realise that they need to pay farmers more for the milk and they need to pass that on to the consumer."

Trevor Guley, a farmer at W D Guley and Sons Farm, thinks that locally produced milk could be the answer to the rising costs. He said: "There has been an increase in the price we receive for our milk but it is being dissolved by rising costs.

"Fuel costs are a big worry and it increases the cost of shopping so the only way around it is to start using local produce.

"Nothing is seasonal like it used to be and to be honest we've been spoilt. You can get strawberries all year round now because they are imported, but transporting food costs money."

But Mrs Plumber is concerned that locally produced milk will not meet demand. She said: "Locally produced is great in theory but you have to remember that this is a volume game and local is fine but you have to have the volume to meet demand.

"There is a demand for local and regional produce out there but I believe it's being used as a marketing tool on the back of climate change but I do accept that people do like to know where the milk has come from."

Ian Johnstone, National Farmers Union spokesperson, admits he is concerned about rising costs but believes dairy farmers have the power to negotiate improved contracts with supermarkets to cover these costs. He said: "British dairy farmers have worked through difficult times in the past and they want to keep going but with every business you have to balance the costs coming in with the costs going out.

"Expenditure for farmers including feed, fertilizer and fuel have all increased. In some cases costs have increased by 100 per cent but the price rise in milk hasn't gone up anything like that.

"Farmers need to look at their contracts with the people they are supplying very carefully because supermarkets need milk to get people though the door. Everyone needs milk for their breakfast and tea so farmers are in a strong position to negotiate.

"Farmers also need to consider working with others to cut costs, for example group buying of seeds, and we will continue to work hard to oppose duty on fuel, which affects costs for farmers.

"Regulation including dairy hygiene investigators, who charge high prices, and environmental regulations, which cost farmers a considerable amount, also need to be looked at. This is the time for farmers to strengthen their position and for us to work hard to lower farmers' costs."