Supermarkets extend milk contracts

The dairy industry received a boost this week when Asda and Morrisons both announced new long-term supply contracts with their suppliers.

Morrisons renewed its fresh milk contract with Arla and Dairy Crest until February 2015 and Asda extended its milk supply contract with Arla until August 2013.

Asda also said it would increase the premium for dedicated producers within the Arla Foods Milk Partnership by 0.5ppl to 1.75p/litre with effect from 1 October.

National Farmers Union dairy board chairman Mansel Raymond welcomed the moves. “I hope it is the start of more stability for the dairy sector. Retailers are responsible to their consumers, but also to primary producers.”