UK companies all hike price paid for milk

By Jim Cornall contact

- Last updated on GMT

Milk prices paid to farmers have risen again in the UK. Pic: ©iStock/pavlinec
Milk prices paid to farmers have risen again in the UK. Pic: ©iStock/pavlinec

Related tags: Milk price, Milk price increase, Dairy farming, Milk

Arla Foods, Dairy Crest, First Milk and Müller have all announced increases to the price paid for milk.

Arla Foods raised its milk price to its farmer suppliers by a further two eurocents per kilogram (US$0.02) from December 1, the fourth consecutive increase since September.

When the increase to the on-account price is applied to the UK standard liter, it equates to a 1.49 pence per liter (1.88 cents) rise in the milk price, bringing it to 24.63ppl ($0.31).

Arla Foods board director, Johnnie Russell, said the overall increase since September 1 was 5.58ppl (7 cents per liter).

Dairy Crest announces two months of increases

Dairy Crest has announced a 2ppl (2.52 cents) milk price increase in January 2017 followed by a further 2ppl increase in February 2017.

This means the Davidstow milk price will be 28ppl (35.2 cents) from January 1, 2017 and 30ppl (37.75 cents) from February 1, 2017.

Ruth Askew, head of procurement at Dairy Crest, said the price increases were “substantial.”

New brokerage customer for First Milk

First Milk has confirmed price increases for December for its Midlands & East Wales pool by 2.5ppl (3.15 cents), and all other cheese pools plus liquid & cheese pools will rise by 2ppl (2.52 cents).

Chairman Clive Sharpe said the additional increase for the Midlands and East Wales pool is the result of securing a new brokerage customer.

“We are also pursuing further opportunities with other customers in the area,”​ Sharpe said.

Müller builds on December price

Müller announced it will add a further 2.5ppl to the milk price it offers farmers, building on its 2ppl hike, which took effect December 1.

The actual price paid to Müller’s farmers on non-aligned contracts for January is expected to be 26.54ppl (33.41 cents). This includes a standard price of 25.44ppl (32 cents) plus the separate retailer supplement estimated to be 1.1ppl (1.38 cents) in January.

Müller is also concluding its country-wide series of 16 meetings with farmer suppliers to gain feedback on future milk contract and farmer representation proposals.

These events follow the acquisition of Dairy Crest’s dairy operations and subsequent expansion of Müller’s milk supply base.

Lyndsay Chapman, agriculture director at Müller Milk & Ingredients, said that the company is bringing together two milk supply groups, each used to different representational models, while moving to a single milk contract that aims to better align the supply of milk with demand in the future.

“Going forward we want to keep as much value as possible within our own farmer/processor supply chain by developing a closer working relationship with farmers, and moving away from current industry thinking which tends to be short term and reactive,”​ Chapman said.

Chapman said that the company expected to send farmers the final contract documents in January, with the option to sign up from February.

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