Muller offers milk price premium for best farm practices

UK dairy processor Muller has announced a 0.5p/litre premium for its 700 non-aligned dairy farmers who take part in three of the milk buyer’s herd health initiatives.

Muller Direct producers must take part in the Muller Farm Insight Programme, the Muller Antibiotic Programme and the National Johne’s Management Plan to be eligible for the price premium.

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What are the three initiatives?

  • Muller Farm Insight Programme: an on-farm health and welfare assessment. The programme provides bespoke advice, benchmarking and identifies potential areas for cost savings. It is managed by agricultural sustainability specialists AB Sustain.
  • Muller Antibiotic Programme: an initiative designed to reduce antibiotic usage on farm.
  • National Johne’s Management plan: UK-wide initiative centred on the control and eradication of Johne’s disease.

The payment has so far been confirmed for a year from 1 January 2019 and will be paid retrospectively on all months producers have taken part in all three of the initiatives at the end of the period.

Premiums will only be applied to litres that attract the discretionary standard litre price, which means that any volumes locked into Muller’s fixed-price mechanism or those forward traded on the future’s market will not be eligible.

Non-aligned producers can join the scheme after the start date, but payment will only be made on litres from the date farmers join.

The premium will help Muller Direct farmers to build better, more sustainable businesses, according to milk supply director Rob Hutchison.

“We know that Müller Direct farmers are deeply committed to the health of their herds.

“Many have already taken important steps to address the unnecessary use of antibiotics, manage Johne’s and look for ways to improve overall health and welfare,” he added.

The benefits of participating in the three schemes, in terms of herd health and welfare improvements as well as benchmarking and sharing best practice would be significant, Mr Hutchison said.

The 0.5p/litre premium followed Muller’s 1p/litre farmgate milk price drop for December, which means producers will receive 28.5p/litre for liquid litres from next month.