Buyers in clamour to win dairy farmers’ milk

A packed meeting of Cumbrian dairy farmers and their families was courted by the top guns from five potential milk buyers on Tuesday (23 January).

The farmers being wooed were the 200 Dairy Crest Direct Members currently supplying First Milk’s Aspatria creamery bought from Dairy Crest last year.

Their Dairy Crest contracts expire in October this year and everybody seems keen to get their hands on the 270m litres of milk up for grabs. 

Trying to win the farmers over were First Milk, Meadow Foods, Milk Link, Caledonian Cheese (part of Lactalis) and Partners in Cheese.

Obvious choice

First Milk would seem the obvious choice as the co-op is already processing the milk at Aspatria, which supplies cheese to retailer Asda.

It has given farmers until the end of January to sign up.

However, the DCD farmers are not keen on the milk price on offer, even though First Milk didn’t rule out a separate Aspatria price in the future at the meeting.

Milk Link said it was prepared to set up a separate quota-holding pool for the members to supply its Lockerbie factory in Scotland.

Co-op sceptics

This could tempt some co-op sceptics because it would mean they wouldn’t have to pay a members’ capital retention levy.

Caledonian Cheese wants milk for its Stranraer creamery, which produces the growing Seriously Strong Cheddar brand, and is prepared to pay over 18p/litre.

But it would not be interested in the entire DCD pool and is likely to cherry pick the members closest to the Scottish border to cut down on transport costs.

It is believed a number of farmers are seriously considering joining the firm.

New factory

Of the rest, Partners in Cheese has already attracted a lot of interest in its plan to build a £50m cheese factory in the county.

About 150 milk producers have already sent in £250 cheques to fund due diligence on the scheme led by Dutch entrepreneur Ronald Akkerman.

If the due diligence process, due to complete by mid February, proves positive the farmers will then have to decide if they are prepared to commit totally.

Mr Akkerman says he will offer a contact similar to their existing Dairy Crest deal.

Whatever happens, the clamour to win their milk shows that dairy farmers might have a stronger hand to play than in recent years.