Dairy Crest cuts both milk prices by 1.75p/litre

Dairy Crest has dropped both its manufacturing and liquid milk prices by 1.75p/litre for October.

The processor is the third of the big four dairy companies to issue cuts of more than a penny in the past fortnight.

Farmers supplying Dairy Crest on Davidstow cheese contracts will be paid 30.34p/litre and those on liquid contracts will receive 28.34p/litre.

The liquid price is now 4.1p/litre lower than it was in June, while the manufacturing price is down 2.85p/litre.

Dairy Crest group procurement director Mike Sheldon said that global dairy markets had fallen at unprecedented speed and this had to be reflected in milk prices.

The company’s statement pointed out that world commodities continued to plummet, UK cream prices had dropped 15% in August and cheese stocks were at record-high levels.

See also: Muller Wiseman drops milk price another 1.8p/litre

“I understand that this reduction will be really disappointing news for our farmers,” Mr Sheldon said.

“However having discussed our position at length with DCD [farmers’ group Dairy Crest Direct], they recognise the severity of the situation.”

“I understand that this reduction will be really disappointing news for our farmers.”
Mike Sheldon, Dairy Crest group procurement director

Mr Sheldon added that volatility was a problem for both farmers and processors, highlighting that there was still scope to take up the company’s cost-tracking formula contract, which will carry about a 3p/litre premium on the liquid price.

In a newsletter to farmers, DCD secretary Michael Masters said he was disappointed to report the cuts, which had pushed prices back to breakeven cost-of-production levels.

“During times of market volatility, DCD members expect that Dairy Crest’s reduced exposure to global markets and broader branded base will provide benefits,” he said.

Dairy Crest’s decision follows a 1.2p/litre drop for Arla producers and a 1.8p/litre cut for those supplying Muller Wiseman.

Lobby group Farmers For Action (FFA) is a running a survey of its members, asking them whether it should launch more protests.

By the middle of last week 600 had voted in favour, with just two against.

A further 200 voted for protests over the weekend.

FFA chairman David Handley said the group’s committee was meeting later this week he would be surprised if some kind of action did not happen within the next fortnight.

“There is a mandate there to do something,” he said.