Dairy Crest cuts milk price by 1.25p/litre from July

Dairy Crest has cut its standard milk price by 1.25p/litre from July.

Farmers on non-aligned liquid contracts will be paid 31.19p/litre, while those on the Davidstow manufacturing contract will still receive 33.19p/litre.

Dairy Crest was the only one of the big four milk processors to hold its prices for both May and June, when Arla, Muller Wiseman, First Milk and several smaller companies issued 1-2p/litre reductions.

David Herdman, chairman of suppliers’ group Dairy Crest Direct, said he was disappointed at the magnitude of the drop.

“I appreciate that the price cut is later than applied by others in the liquid market, but I remain concerned at the competitive position of the standard liquid contract price,” he said.

“The pressure on all milk pricing from falling market returns is clear, so maintaining the Davidstow price at the current level is very welcome,” he said.

The other major British processors seem to be holding their prices for the moment.

Arla will keep its headline price of 33.74p/litre unchanged for June, Muller Wiseman said it has no announcements planned, while First Milk’s board is set to meet on Monday 2 June.

Dairy commodities have continued their downward slide on global markets and UK production remains very high, which have both impacted farmgate prices.

At the last Global Dairy Trade Auction on 20 May, the price index fell 1.8% – the seventh successive fall in as many weeks.

UK milk production for the weeks ending 17 May averaged 43.1m litres a day, 8.4% higher than the same time last year.

Mike Sheldon, Dairy Crest group procurement director, said he was confident the company had a compelling package for farmers, offering flexibility, choice and comprehensive support.

“I recognise a price decrease is disappointing for our farmers but we have delivered on our commitment to strive for stable pricing by adjusting the price by less and later than our competitors,” he said.

“I am pleased to deliver further stability on our cheese price for Davidstow farmers. As our successful Cathedral City and Davidstow cheese brands continue to grow, we need more milk for our Davidstow creamery.”