Caledonian cheese expected to announce Dairy Crest Direct membership requests shortly
Caledonian Cheese is expected to reveal soon how many Cumbrian Dairy Crest Direct members it hopes to sign up.
About 200 DCD farmers currently supply First Milk’s Aspatria cheese factory, which the dairy co-op bought from Dairy Crest last year.
Their Dairy Crest contracts run until October after which they will be looking for a new home for their milk.
Stranraer-based Caledonian Cheese, which is owned by French dairy giant Lactalis, is believed to be interested in about half the 240m-litre DCD pool.
Haulage costs could be an issue, but is believed these will be finalised this week after which a contract will be offered to those farmers it wants to recruit.
Headhunted
Caledonian Cheese has already headhunted 39 farmers in south-west Scotland from co-op First Milk.
It is estimated the deal, which starts from April 1 and is believed to be based mainly on milk quality, could net the milk producers an additional £13,000 to £15,000 a year.
The three-month rolling contract will allow farmers to leave if they are unhappy.
Previously, only six farmers directly supplied Caledonian Cheese. The remainder of their milk — approximately 200 million litres per year — came from First Milk.
Dairy farmer John Watson, of High Mark Farm, Leswalt is one of the farmers who has signed up.
“Lactalis have told us they plan to develop the plant in Stranraer to make more cheese and they were looking to get milk close at hand,” he said.
“Not giving up”
“First Milk were also not giving us a price that was sustainable for many in this area. To produce a litre of milk it takes between 19 and 20p/litre and First Milk were paying about 16.6p/litre.”
First Milk chief executive Peter Humphreys said: “It’s unfortunate that Lactalis have chosen to go down the route of significantly expanding their direct supply pool.
“I believe that there are strong reasons for the two businesses to work closely together, and these reasons still remain.
“Our members in the Stranraer area were faced with a decision whether they wanted to remain a member of an expanding UK-wide dairy business that will continue to look to make strategic moves and focus on returning value back to members, or choose to become a direct supplier to Lactalis.
“I’m pleased to say the overwhelming majority chose to stay with First Milk.”
Speaking at a recent meeting Mr Humphreys said arguing over one or two pence difference in the price of milk per litre would not help the dairy industry move forward.
“It’s all too easy to become fixed on a 1p/litre milk price differeence. We need to develop our relationship with consumers. We need to develop an industry structure that delivers more value back to the farm gate.”
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