Dairy Farmers of Britain has become the latest company to cut its spring milk price, after it announced today (8 April) a 2.2p/litre cut, effective from 1 April.
The move will apply across all its milk supply schedules (black-and-white, Channel Islands and organic) and means that a standard black-and-white litre is now worth 20.2p/litre. The new organic standard litre price has reduced to 30.65p/litre.
DFB chairman John Grantchester said: "It is with disappointment that we have announced this price reduction to our members today. The dairy markets have weakened significantly and the level of competition in both liquid and cheese sectors has brought intense pressure on price and margins across our product range.
"In addition, despite the successful completion of our restructuring programme, our core business continues to face challenges and this is in part reflected in this milk price announcement.
"In setting the April milk price the Board has, therefore, had to take into account our short-term fall in revenue, the need to quickly conclude the reshaping of the business, and the requirements of our banking covenants."
He recognised the late announcement was unsatisfactory, but said it was due to "having to manage the complex mix of factors we face to try to get the best deal we can for the business and our members".
He reassured members that DFB's bank, HSBC, remained supportive as the co-op worked to improve and position the business for the future.
Earlier this week Arla Foods announced that it would cut the price it pays its dairy farmers by 1p/litre from 1 May 2009 and last week OMSCO said its organic milk price would be reduced by 3.4p/litre.