Dairy farmers on liquid milk contracts with Dairy Crest are to receive a price bonus of 0.2p/litre for the milk supplied in November.
The backdated payment is a result of the higher returns from cream sales and will be paid as a separate market adjustment. The company said it should also be able to maintain, or slightly increase the bonus for milk supplied in December.
“We have been working closely with the Dairy Crest Direct Board to make sure our direct suppliers benefit from the current market position. By paying a trading bonus, which is separate to our core milk price, we have developed an innovative mechanism that is flexible and transparent,” milk procurement director Mark Taylor said.
“Looking forward, we expect continued volatility in the commodity markets. We have demonstrated our commitment to share higher returns with our farmer suppliers when they can be achieved from our markets, and will continue to work with DCD.”
Farming unions welcomed the bonus, and hoped urged other processors to act similarly. “I hope that the farmers representing Arla and Wiseman suppliers will be just as successful at getting cream price increases passed back to farmers promptly,” NFU dairy board chairman, Gwyn Jones said.
NFU Scotland milk committee chairman Jimmy Mitchell said all milk processors and co-ops must react to the strong positive signals in dairy markets by increasing prices to suppliers.
“With wholesale markets for cream, powders and butter soaring, cheese imports dropping and liquid milk consumption growing, we feel it is high time this was reflected in the prices being paid back to those producing.
“We need those companies enjoying a period of strong profitability and better market returns to take their farmer suppliers with them or run the risk that the frustration being felt at farm level will boil over if better returns fail to make it back to grassroots producers.”