UK: Asda increases milk payment again

By Dean Best | 25 July 2012

  • Asda offers "winter feed supplement"
  • Says DairyLink farmers paid 29.5ppl
  • Farmers claim cost of production 30ppl

Asda, the UK's second-largest grocer, has again increased the price it pays to milk farmers in its dedicated DairyLink scheme as protests over recent cuts in the industry continue.

The company has offered its DairyLink farmers a two pence per litre "winter feed supplement" from August until the end of the year.

Last week, Asda increased its premium by 3ppl amid protests from farmers angry at price cuts from processors. Blockades and protests have affected processors and retailers, with farming groups calling on retailers, including Asda, to increase prices.

"We understand the increasing cost pressures facing dairy farmers. That is why we were the first retailer to invest in increasing our premium to 3ppl last week to offset the cuts previously announced by Arla," the retailer said.

"We have continued to listen to our farmers and their growing concerns about the forecast cost of winter feeding. With that in mind, Asda will be increasing the premium paid to our DairyLink farmers by a further two pence per litre from August until the end of the year. The premium paid by Asda will be 5ppl above the Arla Foods base price and mean Dairylink farmers are paid 29.5ppl."

Farmers have said the cost of milk production is 30ppl. Costs could increase this winter with recent wet weather affecting fodder crops. The cost could lead farmers to reduce the amount of milk they produce, putting pressure on the UK milk supply.

With protests continuing last night, UK farming minister Jim Paice is meeting the country's retailers to discuss the situation later today (25 July).

Show the press release

 

We understand the increasing cost pressures facing dairy farmers. That is why we were the first retailer to invest in increasing our premium to 3ppl last week to offset the cuts previously announced by Arla.

· We have continued to listen to our farmers and their growing concerns about the forecast cost of winter feeding ((Difficult times ahead.. Kite Consulting, July 2012).  With that in mind, Asda will be increasing the premium paid to our DairyLink farmers by a further 2 pence per litre from August until the end of the year.

·  The premium paid by Asda will be 5 ppl above the Arla base price and mean Dairylink farmers are paid 29.5ppl.

·  As well as taking direct action to support our farmers, we will continue to discuss the wider milk procurement model as part of our commitment to improving the sustainability of the British dairy supply chain, whilst at the same time continuing to help hard pressed families make ends meet.

 

Original source: Asda

Sectors: Dairy, Private label, Retail

Companies: Asda, Arla Foods

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