Tesco to pay small farmgate milk price rise from 1 August

Tesco suppliers will see the price they are paid for their milk increase by 0.02p/litre from 1 August to 28.71p/litre.

The Tesco milk price is calculated every quarter by consultants Promar and reflects the average cost of production of farmers in the Tesco Sustainable Dairy Group (TSDG).

The new price will cover milk supplied for Tesco’s own-brand fresh and filtered milk, single, double and extra thick double cream products and its mature and extra mature cheddar range.

See also:  Tesco launches milk label that guarantees fair price

The price rise comes just days after the introduction of the Fair For Farmers Guarantee, which pledges that every pint of milk sold at Tesco is 100% British and provides customers with information on the price they pay the 600 farmers in the TSDG.

Farmers with a milk contract aligned to Tesco have received prices well above the market average over the past 24 months, so the 0.02p/litre increase is relatively minor.

However, it is the latest in a series of farmgate price increases, which are giving dairy farmers hope that the wider market may finally be in recovery.

Meadow Foods led the way last month with a shock 2p/litre rise in the light of what it called the “green shoots of recovery”.

First Milk members have been told they will get a 0.5p/litre increase on their A litre allocations in July, and a 2p/litre increase on their B litre allocation.

Dairy Crest has also announced it has reversed a 1p/litre reduction due to take effect on 1 July because of signs of stability in dairy markets.