Milk processor Dairy Crest is to increase the price it pays some suppliers by nearly 0.5p/litre.
The company, whose retail brands include Cathedral City cheddar and Country Life butter, will pay dairy farmers on its standard liquid contract an extra 0.42p/litre from 1 August.
Milk procurement director Mark Taylor said the company had listened closely to farmers in its direct supplier group, Dairy Crest Direct, and was seeking to pass on a share of gains from higher dairy commodity prices.
“Dairy Crest has limited exposure to the recent volatility seen in the commodity sector, as we have increasingly pursued a strategy of adding value and reducing risk. As a consequence, we have not experienced the inflation in commodity markets, providing ‘windfall gains’, but equally when markets are depressed our suppliers are not as adversely affected,” said Mr Taylor.
“We have committed to DCD that we will share improved market returns with our suppliers when they are achieved and continue to pay a competitive milk price,” he added.
David Herdman, chairman of Dairy Crest Direct, said: “We have been in continuous discussions with Dairy Crest to achieve a milk price increase to reflect the changing market situation. We are pleased that members will benefit from an increased milk price as a result.”