Muller Milk and Ingredients (MM&I) has announced an increase of about 1p/litre for its non-aligned liquid milk price for October.
This will affect 650 producers in the Direct Milk dairy producer organisation (DPO), as well as the 800 Muller Milk Group (MMG) producers, raising both prices to 19.189p/litre and 19.560p/litre.
Muller, which faced protests for holding its September price, has delivered on chief executive Ronald Kers’ promise earlier this month that prices would rise when returns were felt within the business.
The announcement is also the first stage of price harmonisation between MMG and Direct Milk, which was bought by MM&I eight months ago, in order to reduce the difference between what the two groups are paid.
Pricing equalisation means while the price has increased by 1p/litre across both groups, the actual increases equate to 1.189p/litre for Direct Milk DPO producers and 0.9p/litre for MMG producers.
The final October price will also be subject to a retailer supplement paid by Aldi, Lidl and Morrisons, which equates to 2.894p/litre for July volumes, representing 16% of the total price paid.
As dairy markets continue to improve and standard prices rise, the impacts of these supplements will reduce.
‘A sustained recovery’
“We are hopeful that dairy commodities markets have turned a corner and we will now see a sustained recovery,” said Lyndsay Chapman, agricultural director at Muller.
“It is important to stress that our standard price is competitive in its own right, but with the addition of the retailer supplement, actual realisations for Muller non-aligned farmers are substantially higher than those received by farmers supplying other processors who receive similar supplements but choose not to offer the same level of transparency.
“Whether our farmers are in a supermarket group or not, it is our intention to optimise their actual returns each month.”
A marked decrease in UK milk production, down 7% on the same period last year and rising commodities prices are driving better milk prices to the farmgate.