The retailer Sainsbury’s has announced a 0.26p/l increase in the price it pays to milk producers, bucking the downward trend in prices offered by other dairy processors.
A Sainsbury’s spokeswoman said the decision had been made through the company’s sustainable Cost of Production model and would raise prices for a standard litre to 30.56p from 1 July.
“The model is designed to reward Sainsbury’s Dairy Development Group farmers for outstanding animal welfare and environmental standards,” the spokeswoman said.
“One of cost model’s unique elements is the quarterly review of feed, fuel and fertiliser. This ensures that the most volatile elements of costs will be reviewed every quarter.
“The milk price then changes to reflect these varying costs, ensuring a fair deal for the 324 farmers involved,” she said.
Sainsbury’s agriculture technologist Alice Swift said: “We’re pleased to show that the model is delivering a fair price for everyone while most importantly being sustainable for the whole supply chain.
“The COP model was developed to be transparent and robust for our farmers however this is also good news for customers who want Sainsbury’s to do the right thing on their behalf.”
Mansel Raymond, NFU dairy board chairman added: “Farm gate costs of production are currently over 30ppl, and rising. With this in mind I’d like to congratulate Sainsbury’s.
“Dairy farmers need a sustainable future. Further price cuts [by other processors] will jeopardise this and be met with real anger,” Mr Raymond said.
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