23-07-2014 10:45 AM | Dairy, Finance, News

Dairy Crest announces price cut from September



Dairy Crest announces price cut from September
Dairy Crest has announced a price reduction of 1.1ppl to farmers on standard Liquid and Davidstow contracts from 1 September. Both price changes have been agreed with Dairy Crest Direct (DCD) and are in line with the Voluntary Code notice period of 30 days.

The change to the Davidstow milk price follows a 10 month period of price stability. The Davidstow contract is the only major contract that has not reduced its milk price this year and despite the September reduction, it continues its track record of paying one of the highest milk prices to farmers in the South West, at 32.1 ppl* for a standard litre.

The Liquid milk price adjustment will apply to those farmers with all or a proportion of their milk price on the company’s standard contract. The price change reflects the current market environment over recent months and will give a standard litre price of 30.1 ppl* from September.

In line with their commitment to the Voluntary Code, Dairy Crest’s aim is to provide greater choice and flexibility to farmers within their range of contract options. Following these price announcements, the company have confirmed that they will offer their farmers on standard Liquid contracts a further opportunity to take up their Formula contract for either all or a proportion of their milk supply from 1 October.

Mike Sheldon, Dairy Crest Group Procurement Director confirmed that none of Dairy Crest’s milk prices are subject to capital deductions or other hidden charges. Commenting about the announcement he stated:

“We have worked closely with DCD over recent weeks to agree these price changes and we will continue to review our milk price position together. Whilst I recognise that any correction in milk price is disappointing news for our farmers, I believe we have balanced taking action to reflect the market environment with our commitment to deliver greater price stability and reduce volatility to our farmers.

“We are continuing to work with DCD to provide a range of contract options for our farmers, including our innovative liquid Formula contract for which we will be offering additional volume from October.

“Dairy Crest depends on a sustainable supply of high quality British milk and we are immensely proud of our supplying farmers and the part they play in our world class supply chain. Together with DCD, we are determined to continue to work together to offer a transparent and compelling package to our farmers for the future.”

David Herdman, Chairman of DCD said, “We fully appreciate that any price cuts are a disappointment. However, DCD has worked with Dairy Crest to mitigate the extent of milk price cuts for as long as we could, and have agreed to these reductions applying later than others.

“DCD continues to work with DC on a number of further initiatives, building on the core foundation of the need to provide a competitive level of milk pricing”.

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