Dairy Crest to cut farmgate milk price

Dairy Crest is to cut its farmgate price for standard liquid and Davidstow cheese contracts by 1.1ppl from 1 September.

The price for liquid milk will be reduced from 31.2ppl to 30.1ppl, while the price for the 400 farmers on Davidstow contracts will drop from 33.2ppl to 32.1ppl after a ten month period of price stability.

A statement by Dairy Crest Direct (DCD), which represents the 1,100 farmers who sell their milk direct to Dairy Crest, blamed the reduction on “declines in the underlying global dairy ingredient markets, strong milk production and further cuts in UK competitor pricing”.

Mike Sheldon, Dairy Crest group procurement director, said the producer had “worked closely” with DCD over recent weeks to agree the price changes and would “continue to review our milk price position together”.

“While I recognise that any correction in milk price is disappointing for our farmers, I believe we have balanced taking action to reflect the market environment with our commitment to deliver greater price stability and reduce volatility to our farmers,” he added.

DCD chairman David Herdman said DCD had worked with Dairy Crest to mitigate the extent of milk price cuts for as long as it could.

The reduction follows an announcement from Müller earlier this month that it would drop its standard milk price by 1.2ppl from 3 August to 30.8ppl as a result of continuing challenging market conditions.

The same tough market conditions saw First Milk reduce its liquid milk price by 1.75ppl to 28.75ppl from 1 August, with its manufacturing price reducing by 1.25ppl to 29.60ppl.

Arla Foods reduced its global farmgate milk price for co-operative members on 7 July by €1.50 cents per kg. When applied through Arla’s pricing mechanism, this resulted in a reduction of 1.23ppl in Arla’s UK standard litre price to 32.52ppl.