Sainsbury and Morrisons this week increased the retail price of their milk by 2p a pint to 32p, following a similar move by Tesco and Asda last week.
The upward shift has delighted farmers, who will now try to secure increases across the cheese and long life milk sectors. Doing so was vital if all dairy farmers were to secure increases, rather than just those supplying the liquid market, they said.
This was especially the case for the farmer-owned co-ops, which tended to supply a large proportion of their milk into the other sectors. Farmer-owned co-op Milk Link, for example, is the UK’s second-largest cheese
producer via its subsidiary The Cheese Company, and is also the biggest long life milk supplier, but only has a small fresh liquid milk business.
The First Milk and Dairy Farmers of Britain co-ops, as well as Dairy Crest, also have significant exposures to cheese.
Their suppliers are subjected to the same supply-chain cost pressures that the liquid milk price rises are designed to relieve, said farmers’ leaders.
If price rises failed to materialise in these sectors, the price gap between direct liquid milk-supplying farmers and those supplying the other markets would increase further, experts have warned.
That gap, of 2.5ppl, is already deemed to be unsustainable, leading to increased cross-industry frustration and tension.
However the the NFU’s dairy board chairman Gwyn Jones said retailers were “reluctant to move” on cheese, although discussions had taken place with processors. At least one cheese processor said “mixed messages” were coming out of one of the leading multiples.
Chris Walkland
The upward shift has delighted farmers, who will now try to secure increases across the cheese and long life milk sectors. Doing so was vital if all dairy farmers were to secure increases, rather than just those supplying the liquid market, they said.
This was especially the case for the farmer-owned co-ops, which tended to supply a large proportion of their milk into the other sectors. Farmer-owned co-op Milk Link, for example, is the UK’s second-largest cheese
producer via its subsidiary The Cheese Company, and is also the biggest long life milk supplier, but only has a small fresh liquid milk business.
The First Milk and Dairy Farmers of Britain co-ops, as well as Dairy Crest, also have significant exposures to cheese.
Their suppliers are subjected to the same supply-chain cost pressures that the liquid milk price rises are designed to relieve, said farmers’ leaders.
If price rises failed to materialise in these sectors, the price gap between direct liquid milk-supplying farmers and those supplying the other markets would increase further, experts have warned.
That gap, of 2.5ppl, is already deemed to be unsustainable, leading to increased cross-industry frustration and tension.
However the the NFU’s dairy board chairman Gwyn Jones said retailers were “reluctant to move” on cheese, although discussions had taken place with processors. At least one cheese processor said “mixed messages” were coming out of one of the leading multiples.
Chris Walkland
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