Dairy Crest has today (23 June) announced that it will cut the price it pays farmers on its Davidstow cheese contract by 0.5p/litre from 1 July.
The move follows 1.25p/litre and 1p/litre reductions to the Davidstow price earlier this year, but the company said the July price would be guaranteed for the next four months, effectively creating a “floor” in the market until November 2009.
“We wrote to our Davidstow suppliers last month to keep them updated on the difficult conditions in the cheese market,” Dairy Crest’s milk procurement director, Mark Taylor said.
“The volume of imported cheese is a significant pressure, along with the challenging retail environment. Although Cathedral City is the leading UK Cheddar brand and continues to perform well, extensive promotional support is essential to protect its position in the market and deliver value to consumers.”
He said the company remained committed to a “fair and responsible” approach to milk pricing and was working closely with Dairy Crest Direct, which represents the 1400 farmers supplying Dairy Crest.
DCD chairman David Herdman said: “The Davidstow price reduction will be very disappointing news for our members in the south-west, but we believe the agreement to guarantee a minimum price until November will be seen by our members as a step in the right direction.”
There will be no change to Dairy Crest’s standard liquid milk price.