Dairy Crest becomes the latest British processor to cut milk price

One of the largest UK milk processors, Dairy Crest, has announced a reduction of 1.75p/L for farmers on standard liquid milk contracts from October 1.

The liquid milk price for farmers with all, or a proportion, of their milk price on the company’s standard contract will be 28.34p/L.

According to Dairy Crest, these price reductions reflect the dramatic falls in global dairy markets over the past few weeks, further exacerbated by the recent Russian trade ban on dairy products.

It says the 17% reduction in the Global Dairy Trade auction price between July and August means that prices are now around 50% down from their peak at the start of 2014.

Dairy Crest says at the same time, UK cream prices have fallen back 15% this month alone and cheese stocks are at record high levels.

It added that with half of the butterfat supplied by our farmers being processed into butter and half being sold on the commodity cream market, these external market conditions have a very direct impact on the farmgate price of milk.

Commenting on the reductions Mike Sheldon, Dairy Crest Group Procurement Director, said: “As has been widely reported, global dairy markets have fallen dramatically over the past few weeks at an unprecedented speed and level. Unfortunately we have had to reflect this within our milk prices for October.  I understand that this reduction will be really disappointing news for our farmers. However, having discussed our position at length with DCD, they recognise the severity of the situation.

“I recognise that price volatility is difficult for farmers and processors alike, which is why Dairy Crest and DCD pioneered the development of a Liquid Formula that helps to smooth out the peaks and troughs. We will be offering further volume to farmers from October 1.

“I also urge farmers to take advantage of the full range of farm support services that Dairy Crest provides. These include our White Gold Service and individual Farm Business Review, which are designed to help farmers to earn the maximum benefit from their contract.”

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