UK: Dairy Crest "confident" of upping milk price
By Dean Best | 12 September 2012
- Indication Dairy Crest could up prices
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Dairy Crest said price hike could come this autumn |
Dairy Crest has said it is "on track" to up the price it pays farmers for milk after postponing plans to cut prices amid the fierce protests this summer.
The UK dairy processor, which owns brands including Cathedral City cheese and Country Life butter, said "improving" milk and cream markets meant it was "confident" of raising prices this autumn.
In July, Dairy Crest shelved plans for a cut on 1 August and said it has since had talks with farmers to look at ways to up prices.
The company said it had asked for "cost price increases" from its own customers and would "reflect" the hikes in the farmgate price it pays. Higher commodity cream prices will also have an impact.
A meeting with its farmers will be held later this month. Dairy Crest expects to announce a price increase after the discussions.
Milk procurment director Mike Sheldon said: "We are in no doubt about the difficulties our non-aligned farmers have been facing and are confident that all our customers are now also aware of these difficulties and many are prepared to pay more for their milk as a result."
Farmers blockaded processing and retail distribution sites this summer after planned price cuts across the sector were announced. The protests largely succeeded in stopping the cuts.
Earlier this month, UK dairy processors and farmers formally agreed a deal on a code of practice to govern relations in the sector. Final implementation of the voluntary code of practice is subject to legal approval.
Dairy Crest on track to deliver farmer milk price increases
Dairy Crest is confident of delivering higher milk prices to its farmers as the autumn progresses. This reflects improving milk and cream markets.
On 26 July Dairy Crest set aside a market-related farmgate 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. Some customers agreed to pay Dairy Crest more from 1 August and Dairy Crest has funded the shortfall while discussions with other customers are ongoing.
Following those 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 farmgate milk price. Commodity cream prices have also started to increase and this too will be reflected in future farmgate prices.
Dairy Crest has a scheduled meeting with DCD later this month and it is anticipated that increased farmgate milk prices will be announced shortly afterwards.
Mike Sheldon, Milk Procurement Director, commented:
"We are in no doubt about the difficulties our non-aligned farmers have been facing and are confident that all our customers are now also aware of these difficulties and many are prepared to pay more for their milk as a result. The work of the Dairy Coalition has been helpful in highlighting the issues faced by all dairy farmers but ongoing direct action puts the progress we are making at risk.
We have agreed a transparent mechanism so our farmer representatives can see that improved returns are properly reflected in our farmgate milk prices."
Original source: Dairy Crest
Sectors: Dairy
Companies: Dairy Crest
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