Average annual price will be back to little more than 2000's record low of 16.9p Dairy Crest paves the way for more farmer pay cuts After their best year in 2001 since 1998, farmers are now seeing regular cuts in their monthly farm gate prices. The process started in January when, according to the latest DEFRA survey, the average across the UK was 18.84p per litre, 0.8p down on December, and the lowest figure since spring last year. Many milk buyers have implemented price cuts since January which have varied from 1.0 to 1.6p per litre but Dairy Crest, the largest milk buyer in the UK which has held its prices through the winter, announced a cut last week of 1.95p per litre to operate from April 1. This decision will pave the way for other major milk processors to finalise their prices from April and, in general, prices are expected to fall to levels around 2p less than those operating last October when the rising trend first started to change direction. On a full-year basis, and allowing for the fact most buyers operate a seasonal schedule with prices lower in the spring and early summer and higher in the autumn and early winter, the indication is now that the average annual price farmers will receive will be back to little more than the record low price of 16.9p per litre in 2000. It was this level which persuaded many dairy farmers to quit milk production and eventually persuaded major supermarkets to raise prices for liquid milk on condition the extra was paid back to farmers. On this occasion the price reductions are being blamed on falling market prices for butter, milk powder and, to some extent, for cheese. This follows a progressive collapse in world market prices from late summer, a collapse which has since spread into EU markets and into the UK. {{CANNED GOODS }}

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