Farmers supplying Dairy Crest’s Davidstow plant will see a 0.6p/litre cut to their milk price from 1 December, but have been promised no further cuts for the next three months.
Producers with a liquid milk contract have had their prices held.
The average price paid to Dairy Crest’s non-aligned liquid farmers is currently 23.3p/litre.
Dairy Crest said at 23.24p/litre, the Davidstow contract remained one of the most competitive offers to farmers in the South West.
“The Davidstow milk price has consistently delivered a premium price, as well as stability, for farmers,” the company said.
“This is only the second reduction in a 10-month period that has seen significant milk price reductions across the board.”
Ruth Askew, head of procurement at Dairy Crest, explained that the adjustment to the December milk price for farmers on the Davidstow contract was necessary for the cheese business to remain competitive.
“While I realise this will be extremely disappointing news for farmers, Dairy Crest has tried to bring as much stability as possible by introducing a milk price floor until the end of February 2016.
“The milk price floor comes in recognition of the additional pressures facing farmers throughout the winter months.
“This provides our Davidstow farmers with a guarantee that their milk price will not reduce further during this three-month period.
“I hope this shows our ongoing commitment to our Davidstow farmers, in what continues to be a very challenging environment for the dairy sector.”
Dairy Crest and Dairy Crest Direct will continue to review the Davidstow milk price on a monthly basis as normal.
The December formula milk price has not yet been calculated. The November price is 26.72 p/litre.