Dairy Crest have announced a cut of 1.3 ppl for farmers on standard Liquid and Davidstow contracts from 1st November 2014.
The company recently said it will close two factories, in what it calls a 'challenging trading environment', which will put 260 jobs at risk.
For farmers on a Davidstow contract this takes the price to 29.04 ppl for a standard litre from 1st November 2014. The Liquid milk price for farmers with all or a proportion of their milk price on the standard liquid contract will be 27.04 ppl from 1st November 2014.
Commenting on the reductions Mike Sheldon, Dairy Crest Group Procurement Director said: “We are very disappointed to have to make this further price announcement to our farmers. The situation in global commodity markets, which directly impacts our domestic returns especially whilst milk production remains strong, has not improved. We have therefore had to reflect this in our November milk prices.
“This is a challenging time for the dairy sector and all of us who work in it. We hope that the dairy markets will return to a steady footing soon, but in the meantime we will continue to work in partnership with DCD to deliver a robust support package for all of our supplying farmers.
“We are pleased that over 200 of our farmers have now taken up the opportunity to put some or all of their milk volume on one of our Formula Contract options. Following the latest offer process, for Formula Contracts from October 2014, all the milk available was signed up and we are in the process confirming the outcome to the farmers who applied.”
"Our Dairies operations have been loss making in the period despite the increase in property profits. We continue to make progress with FRijj and sales are growing. We also continue to reduce costs in line with our £20 million annual target," the company announced.
Surrey-based Dairy Crest said they have started consultation with employees regarding the closure of the glass bottling dairy in Hanworth, West London and a specialist cream potting facility in Chard, Somerset. Together these two sites employ around 260 people.
Mark Allen, Chief Executive, commented: "I am pleased that in the current challenging trading environment overall we continue to perform in line with our expectations. Taken together our key brands have performed strongly and the improvements we have made to our Dairies operations in recent years have made them more resilient. We continue to take the difficult decisions that are necessary to drive the business forward."
