NFU praises record breaking milk prices

The announcement from Tesco that it is to pay its dairy farmer suppliers a record high milk price has been praised by the NFU today.

Milk producers in its Sustainable Dairy Group will receive 29.78ppl from April 1. The news follows other positive price announcements in the cheese market from two of the country’s cheese manufacturers, Wyke Farms and Barbers, which are to pay the highest prices on record for milk being made into cheese from April (27.6ppl).

NFU dairy board chairman Mansel Raymond said: "Tesco’s price model for liquid milk is now breaking records with a price that tops any price previously paid by a retailer for milk. What’s more, the price guarantee that Tesco offers its dedicated group of farmers means that it’s set for six months.

"Tesco’s dedicated suppliers are investing in their businesses, they are more confident about the future, and they are producing more milk because of it. Tesco has secured its milk supplies for the future and has a great story for its customers – it’s a win-win situation. I just can’t understand why more retailers and buyers of milk and dairy products aren’t showing the same level of commitment to their farmer suppliers.

"The recently published NFU Cost of Milk Production report suggested that the average cost of producing a litre of milk was 29ppl. Yet, the average British milk price in January was just 25.6ppl. Tesco will be one of only a few retailers paying more than this which is unacceptable. All retailers should be reflecting the strength of dairy markets in the price they pay for milk and cheese and ensuring that their dairy suppliers are able to make a fair profit as well as covering their costs.

"I said at the start of the year that I wanted 2011 to go down in dairy history for being a bumper year for milk prices. The record levels being set for milk and cheese prices so far this year are a very encouraging sign that this could happen."