Farmgate price cuts lead to league table shift

Price cuts by almost all milk processors have led to a shift in the DairyCo league table this month, although Dairy Crest’s Waitrose contract remains near the top of the annual average, at 31.05p/litre. However, its May price of 28.1p/litre was well below DC’s Sainsbury contract, which was set at 29.43p/litre, and would rise to 30.56p from 1 July.

Following a 2.73p/litre cut, Wiseman’s Tesco contract dropped a place, at 26.64p/litre, while Lactalis/Calendonian Cheese climbed up with a 1.79p increase, to 29.26p/litre for the month. That pulled its annual average up by 0.08p/litre, to 29.61p/litre.

In contrast to the gloomy commodity market, flavoured milk sales have rocketed, rising by 12% in value in the year to 13 May. Although only making up a small proportion of the overall dairy market, volume sales increased by 4.7% to 72.5m litres, with prices up by 7%, to £1.43/litre. The number of households purchasing flavoured milk rose by 4.4%, year-on-year, said analyst Kantar WorldPanel.

Private labelled product sales grew by 18.7% in volume, and 17% in value. And although branded products saw a 2.3% decline, higher prices boosted the market value by 10%.

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