Dairy Crest: 2 pence milk price increase

- Last updated on GMT

Related tags: Milk, United kingdom

The ongoing heated debate in the UK that addresses the issue of
growing multiple retailer power in terms of milk pricing reached an
agreement for many farmers last night.

Dairy Crest the UK's largest producer of milk, has announced that it plans to increase the amount that it offers farmers for milk that they produce for cheese by 2 pence. The decision comes into effect on milk that was purchased from 1 December.

After a day of what has been described by some as a marathon of discussions between the company and farmer representatives, Dairy Crest caved into the pressure that farmers across the UK have been mounting throughout the year.

The battle for milk prices has been an issue for many a year in the UK, and has seen the formation of many farmer groups who had campaigned to see the end of what they saw as unfair prices for milk that they produced. Mounting pressure has been building on the retailers in the last few months. The Farmers for Action group, that has an estimated 5,000 members, has been campaigning for fairer milk prices throughout the year in an effort to gain the retailers' attention.

Last month the group staged a protest where an estimated 300 farmers joined picket lines outside the Somerfield distribution centre in the south west of England, and the organiser of the protest, Mike Haskew, told DairyReporter.com that the group "plans to keep the pressure on until retailers are willing to reflect their profits".​ A FT.com article published yesterday suggested that an unprecedented protest from farmers across the EU is expected to take place later in the month.

In Wales for example, the Welsh National Farmers Union (NFU) group says that the price that retailers has offered farmers is 'uneconomical.' An instance last year revealed that a particular retailer had been charging 75 pence per litre for milk that it purchased for 17 pence.

Yesterday, Mike Sheldon, Dairy Crest's purchasing director, addressed the demands that many groups had made:

" Intensive discussions between the company, farmer representatives and retailers have secured the two pence increase. The support shown by retailers has clearly demonstrated their appreciation of the pressures on UK dairy farmers."

However, the chief executive of the 4,000-member co-operative, First Milk John Duncan, believes that not everyone will be satisfied with the outcome. First Milk have been committed to gaining what it describes as fairer milk prices.

"I am disappointed that producers are not going to get the full 2p for October and November. However, I do understand that it has been difficult for the processors to recover the full increase we [farmers] would have liked from the market,"​ Duncan added.

In the last three months Dairy Crest's average price for milk for cheese per litre has increased three per cent. The group is planning to have internal discussions on how it will apportion the price increase across the direct supply base.

This action by Dairy Crest may encourage other dairy outlets and producers to follow a similar policy with regards to milk prices.

Related topics: Markets, Pricing Pressures, Fresh Milk

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