Dairy Crest has announced its milk price to its Davidstow farmers will increase by 1ppl to 29ppl from September 1.
It had previously announced an agreement with Dairy Crest Direct (DCD) in April to hold the price at 28ppl from July through to the end of September, but had decided to raise the price earlier than agreed. The price dropped 1ppl in June and a further 1ppl in July.
Chris Thomson, group procurement director at Dairy Crest, said: “Since May, there have been some significant increases in dairy commodity prices, particularly fats.
“We have therefore decided, with support from DCD, to raise our milk price ahead of the expiry of our agreement made in April.”
He added it had ‘significantly increased’ its Davidstow milk price since November 2016 with a ‘commitment to be competitive and fair to the 360 farmers we work with in the South West’.
“This will continue to be our approach, and is reflected in the price increase for September 2017.”
DCD Chairman, Steve Bone, said: “We welcome the announcement that Dairy Crest, having previously agreed with DCD to hold the price through to 1st October 2017, has recognised the improving market situation and will move outside the previous agreement, increasing the price paid to Davidstow suppliers by 1ppl from the 1st September 2017.”
NFU dairy board chairman Michael Oakes said there was some real frustration from Dairy Crest farmers.
“I would have expected it to jump up a bit more considering the June and July drop when the market did not drop back.”
He highlighted news they had needed to reduce their promotion for Country Life due to the high price of buying cream.
“One of the issues is they have got to buy the cream, especially if you need to put it onto promotions.
“In this really buoyant market, the dairies prices are still reducing to consumers.”
Source: FG Insight