Dairy Crest has announced that it is to cut the amount it pays farmers supplying milk for the liquid market by 0.5p/litre from 1 April.

Arthur Reeves, Dairy Crest’s milk purchasing director, said: “The cut in our prices reflects the continuing weakness in commodity markets, particularly cream.”

He added that he was exploring ways to offer a stable pricing to milk suppliers. But several points were preventing that.

·         Recent changes in retail prices made it hard for customers to commit to stability.
·         Milk was still being sold too cheaply into the middle ground.
·         No competitors had announced their April prices.
·         Producers were are under cost price pressure and might not wish to fix at today’s prices.

“We need to let the market settle down a bit before drawing these discussions to a conclusion,” Mr Reeves added.

Dairy Crest last moved its liquid price in October 2005, when it agreed to hold prices through to the end of March 2006.

The price paid to suppliers of milk for cheese will remain unchanged.

* Further details in the next issue of Farmers Weekly, out on 24 March.