Dairy Crest Direct suppliers to get higher than expected retailer supplements in December

Dairy Crest Direct (DCD) has confirmed that its standard liquid and organic milk prices will remain unchanged for January 2016 but the retailer supplement for December will be higher than anticipated.

This will be the fifth consecutive month that the standard liquid milk price has stayed at 21.66p/litre.

The retailer supplement, coming from Lidl and Morrisons, will be 0.67p/litre in December statements (for milk supplied in November) and 0.9p/litre (as an estimate) in January statements (for milk supplied in December) – higher than was previously estimated.

This follows the first retailer supplements in November statements (for milk supplied in October), which was lower than had been estimated, due to a larger volume of raw milk delivered.

However, the new base price coming into effect and agreed in December last year for all DCD and Dairy Crest formula will be 1.6p/litre lower.

See also: Arla cuts milk price for non-owner direct suppliers

DCD said many producers on standard liquid contracts had also secured litres priced by formula.

It estimated that, subject to final AHDB November figures for the January price and excluding the retailer supplement, the weighted average price for January would be about 23p/litre.

DCD said EU production continued to accelerate alongside the UK’s 30-year milk production high and had pushed global dairy ingredient markets lower throughout November.

“As a reflection of this, AHDB in declaring their monthly wholesale price review last week, reported reductions in all dairy ingredient markets,” said DCD’s latest newsletter.

“EU intervention and private storage aid is again actively removing surplus dairy products off an oversupplied market.

“In summary, any litres of milk produced today without a defined customer can only be sold at a significant discount”