A group of dairy farmers supplying First Milk are trialling a new cheese pricing model in collaboration with Morrisons.

The retailer has teamed up with the UK farmer-owned co-operative to develop a new pricing model, which aims to ensure the sustainable supply of British cheddar.

The new pricing model will track external market indicators and cheese co-products to establish an average price for a tonne of cheese; farmers will then be given a set price for their milk for three months.

Intially, the partnership will focus on all Morrisons mild cheddar, but the retailer hopes to expand the project to supply all of its cheddar through the process, if the trial is successful.

“This is an innovative step which will help to secure the future of our great range of British cheddars, produced using milk from British dairy farms,” said Morrisons chief executive Dalton Philips.

“We hope that the transparency of our pricing model, our commitment to British products and the investment we are making to develop win-win sustainability programmes will build trust up and down our supply chain, from our farmers to our customers.”

First Milk’s senior executive director Stephen Faulkner described the project as an “exciting development for the business” and said it would create more transparency and trust across the supply chain.

Earlier this year, First Milk suggested it could be forced to cut the price it pays farmers on cheese contracts unless retailers paid more for cheese, sparking farmer protests across the country.

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