Following talks, the firm has requested a cost price increase from its customers, which it has informed its farmer suppliers will be reflected in an increase in its future farm gate milk price.
The announcement follows a summer of farmer-led protests in the UK relating to processor-planned 1 August 2012 milk price reductions. The demonstrations, which were organized by the Farmers for Action (FFA) campaign group, targeted a number of processors including Dairy Crest.
As a result of the rallies, Dairy Crest pushed back its August-planned price cuts by two months while talks with farmers continued.
The promise from Dairy Crest follows similar announcements from Arla Foods UK and Robert Wiseman Dairies.
Milk price request
“On 26 July Dairy Crest set aside a market-related farm gate milk price reduction it had planned from 1 August to give it time to discuss with its customers ways for Dairy Crest to support its farmers by paying higher milk prices,” said a statement from the firm.
“Some customers agreed to pay Dairy Crest more from 1 August and Dairy Crest has funded the shortfall while discussions with other customers are on-going.”
“Following these discussions, Dairy Crest has now requested cost price increases from customers and has agreed with representatives of its farmers, DCD, that it will reflect increases it receives in its future farm gate milk price,” Dairy Crest said.
Increasing commodity cream prices will also be reflected in future milk prices, the firm added.
Dairy Crest confirmed that it has scheduled a meeting with Dairy Crest Direct (DCD) – which provides independent representation to the 1,280 Dairy Crest milk suppliers in England and Wales – for later this month.
Dairy Crest expects to announce increased farm gate milk prices “shortly afterwards.”
DCD has welcomed the Dairy Crest statement.
“DCD welcomes Dairy Crest’s statement that it will deliver higher autumn member milk prices in response to the higher cost base on farm. Dairy Crest has written its customers to seek price increases, and to reflect this in the farm gate price paid,” said the organisation.
Industry confidence
The Dairy Crest milk price announcement is the latest from UK dairy processors.
Earlier this month, Arla Foods UK increased the standard price it pays to dairy farmers for milk from 27 pence per litre (ppl) to 29.5ppl.
It also introduced a new, more transparent milk pricing and sourcing model in an effort to “build confidence in the British dairy industry.”
Robert Wiseman Dairies launched a similar scheme – the Wisemilk Initiative. Under the Initiative, Robert Wiseman will work with farmer representatives to deliver better transparency on the way it decides milk prices.