Dairy Crest to hold milk price for October

By Laurence Gibbons

- Last updated on GMT

Dairy Crest has frozen the price it pays its farmers for milk
Dairy Crest has frozen the price it pays its farmers for milk

Related tags Dairy crest Milk British dairy farmers

Dairy Crest will hold the milk price it pays its farmers for October, both for its Davidstow and liquid milk contracts, according to the business.

The Davidstow milk price will remain at 26.42p per litre (ppl) and is one of the highest milk prices paid for a manufacturing contract, Dairy Crest claimed.

Dairy Crest will continue to pay 21.69ppl for standard liquid milk and 27.27ppl for formula. That makes the weighted average price it pays its non-aligned farmers 23.5ppl.

Dairy Crest’s Dairies md Mike Sheldon said the business was pleased to be able to hold its milk price at a “really tough time” ​for the dairy sector dealing with sustained low market returns.

Depressed markets

“To compound the impact of the depressed markets, milk supply has remained significantly above levels expected for this time of year and so we have a greater proportion of milk processed into commodity products,”​ he said.  

“We continue to do everything we can to support our farmers.  We know how important price stability is and our formula contract has helped deliver this during recent months for over 200 of our farmers on standard liquid contracts.​”

Milk price cuts in 2015

  • 2.43ppl: First Milk (February 1)
  • 1.75ppl: Müller UK & Ireland (March 5)
  • 1.8ppl: Arla Foods (July 9)
  • 1.5ppl: Dairy Crest (March)
  • 0.8ppl: Arla Foods (September 1)
  • 1.4ppl: Dairy Crest (September 1)

The sale of Dairy Crest’s dairies business to Müller Wiseman would create a business of scale and focus that would benefit British dairy farmers, Sheldon claimed.

The £80M sale is expected to receive Competition and Markets Authority’s approval​ by as early as next month, Dairy Crest added.

Retailers to pay more for milk

Following a year of milk price cuts, Dairy Crest’s announcement followed Tesco’s pledge​, earlier this month, to pay more for milk for its cheeses over the winter months.

Asda also revealed it would increase the amount it pays​ its milk supplier Arla to 28ppl.

Morrisons, Aldi and Lidl have all agreed to increase the price they pay for milk. However, all are still below the estimated cost of 30ppl for producing milk.  

Sheldon said retailer support for dairy farmers was positive news.

“We are not yet in a position to confirm what this means for our farmers on non-aligned liquid contracts,”​ he said.  “However, we have clearly committed to Dairy Crest Dairies that all money we receive from our customers to support farmers will be used to supplement the milk price we pay.”  

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