Cheese processors announce milk price drops

Cheese manufacturers Dairy Crest and Barbers both dropped farmgate milk prices today, but still hold a 1-2p/litre premium over most liquid contracts.

Dairy Crest dropped its April price by 1.25p/litre to 29p/litre, while Barbers knocked 1p/litre off its price to 28.87p/litre for next month’s manufacturing standard litres (4% butterfat, 3.4% protein).

Both processors cited the universal falls seen across the board from other manufacturers and the resultant need to remain competitive in the marketplace.

See also: Milk price – ‘budget for 25-26p/litre, but hope for 27p/litre’

UK wholesale prices for mild cheddar have only fallen by about half those of bulk cream and butter in the past six months, with a slight shortage of UK cheese further insulating the prices for cheese contracts.

Average UK wholesale prices for bulk cream and butter for February were 35% and 30% down on the highs of six months ago at £1,850/t and £4,300/t, respectively, while mild cheddar only lost 16% of its value at £2,925/t across the same period.

This is reflected in farmgate milk prices – where Muller and Arla have seen their prices fall by 13.1% and 16% since the start of the year, Dairy Crest and Barbers have experienced more modest falls of 9.4% and 7.4%, respectively.

Dairycrest response

“Although disappointing news for our farmers, Dairy Crest is committed to paying a fair market-related price,” said Chris Thomson, group procurement director at Dairy Crest.

“Once again this move is lower, and effected later, than those of many other dairy companies.

“As the market changes, we must ensure that our products remain competitive. We will continue to monitor price movements, but remain committed to paying a fair milk price to all of our Davidstow farmers.”

Barbers response

“We had hoped that as we reduced our milk price by -1.25p/litre for March – our first reduction for almost a year – and as 2018 dairy markets have recorded some signs of improvement, that we would have been able to hold our March position for April,” said a Barbers spokesperson.

“Unfortunately, this has not been possible due to the significant change in the competitive position for March, with the Barber’s price now at a premium of +2.80p/litre (10%+) above a major competitor.

“While understanding the effect on farm of this latest reduction, retaining our sales competitiveness also remains vital for the longer-term sustainability of our supply chain and ultimately milk price delivery longer term.”

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