DAIRY CREST has announced it will cut payments to its producers who supply milk for cheese by 0.5p/litre from the New Year.

Arthur Reeves, milk purchasing director, stressed that the cut wasn‘t a reflection of the commodity market but said that the company just couldn‘t compete with the newly acquired cheese businesses of co-ops Milk Link and Dairy Farmers of Britain.

“Our competitors have had a significant advantage over us in terms of milk price for months.

“Recent price cuts have increased the differential to about 1.5p/litre which is unsustainable.

“If we were to leave prices as they are, other manufacturers would be in a position to sell cheese made now for up to £150/t less than us next spring.”

Mr Reeves said even after the cut for January Dairy Crest‘s suppliers will be receiving a substantial premium over many other producers.

“We estimate that over the past eight months an average supplier will have received approximately £8000 more from us than other cheese manufacturers.”

For more detail see this week‘s FARMERS WEEKLY (w/e Dec 24).