Müller and Arla have become the latest dairy companies to reduce their farmgate milk price by 2p per litre, thegrocer.co.uk can reveal.
Both cuts are effective from 1 June and come after Dairy Crest and Robert Wiseman Dairies announced cuts of their own in the past week.
Müller would not confirm what its new milk price would be for farmers supplying its yoghurt business, other than to say that it was slashing the price by 2ppl.
Arla, meanwhile, confirmed it had sent a letter to farmers informing them of the cut, which will take its non-aligned milk price to 27ppl.
The news comes after Wiseman – now owned by Müller – announced on Monday a 2ppl cut to its standard farm-gate milk price, citing a challenging market environment and the recent collapse in the price of bulk cream.
“Higher returns from cream prior to the turn of the year partially compensated for other pressures facing the business, but the collapse in bulk cream value since the beginning of 2012 has resulted in an untenable position,” the company said.
Last week Dairy Crest announced a 2ppl price cut to its non-aligned farmers. It said the cut was necessary to shore up its liquid milk business, which had come under pressure from a “tough consumer environment”, strong competition in the middle ground and “steeply falling commodity markets”.
NFU chief dairy adviser Rob Newbery said the union was “very angry” and “disappointed” that the four processors had slashed farmgate prices by 2ppl across the board. Farmers had worked hard to meet individual processors’ specifications, Newbery said, so it was “disappointing to see them treated as a herd when it comes to the rewards”.
A number of NFU members are planning to write to milk buyers to “express their dismay” and will also write to their local MPs, urging them to back changes to dairy contracts. A meeting between processors, farmers and Defra – to discuss dairy contracts, among other issues – is scheduled for 10 May.
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