Freshways plans to pay 50p/litre for milk in September

Freshways has announced it plans to be the first processor to pay producers 50p/litre, starting in September.

The company also confirmed a July price of 45p/litre for a standard liquid litre of 4% butterfat and 3.3% protein.

The liquid processor is the first to release a target price for September and break the 50p/litre mark for a standard litre, according to milkprices.com.

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Bali Nijjar, managing director at Freshways, wrote to suppliers announcing the goal and setting out the reasons behind the decision.

He said farm production costs are unlikely to reduce in the short term, commodity prices are at a level that commands this milk price, and he believed the spot price for August would be at about 50p/litre.

“There are currently no signs that milk volumes are increasing and, in fact, analysts think the fall-off in production after the peak is faster than in previous years. We want to mitigate this for our milk pool,” said Mr Nijjar.

“Retail milk prices are increasing. Aldi is now at £1.35 for four pints, and Sainsbury’s, Asda and Morrisons are at the same level. We also expect our customers to increase their prices to match.”

Merger

The merger between Nijjar Group Holdings Ltd (Freshways) and Medina Holdings Ltd was given the go-ahead by the Competition and Markets Authority in March and is due to be completed by July.

The vast majority of producers who were previously with Medina have been transferred to agreements with Freshways and will therefore receive these prices.