Dairy Crest Direct’s formula contract price is set to increase by 0.153p/litre to 32.082p/litre from 1 October.
This takes the formula price 0.692p/litre ahead of Dairy Crest’s standard litre liquid price.
Launched in March this year, the contract calculates a monthly milk price via a formula tracking five key costs: bulk cream, retail liquid milk (four pints), concentrates, fertiliser and red diesel.
Following a first-come, first-served application process, 175 farmers signed up all or part of their milk supply to the formula contract. It was intitially open to 100m litres of milk.
Based on August market values, the farmgate milk price rise was driven by a buoyant cream market. The value of cream rose by £30/t to £1,720/t.