Dairy Crest has announced after six months of milk price stability, the Liquid milk price for farmers supplying all or a proportion of their milk on a standard Liquid contract will reduce by 1.4ppl to 21.69ppl from 1 September 2015
There is no change for farmers on a Davidstow contract. The milk price will remain at 26.42ppl. This follows an increase of 0.25ppl for the August milk price, announced last month.
The Liquid milk price change has been agreed with Dairy Crest Direct (DCD) following in-depth discussions in line with the new DPO status achieved by DCD last month.
Dairy Crest’s Mike Sheldon commented: “In the past month, dairy markets have declined further, with the result of the last GDT auction being widely reported as extremely disappointing for the whole dairy supply chain. At the same time, milk supply has remained strong and ahead of forecast. This has meant we have had to process a significant volume of milk into commodities such as skimmed milk powder and cream. Therefore we are now in the position that we have to reflect these adverse market circumstances within our liquid milk price.
“We are very aware of the challenges our farmers are facing and we will do everything we can to continue to support them through our farm business teams and additional support services at this difficult time.”
David Herdman, Chairman of Dairy Crest Direct commented: “Earlier this year we agreed to apply milk price floors stabilising Liquid and Davidstow prices to the end of June. Further agreements were concluded with Dairy Crest to extend this stability to the end of August; a significant result which we hoped would take us to a position of more balanced supply and demand.
Through this period of stability, markets have weakened, production has remained strong and competitor pricing has continued to fall. It has therefore proved impossible to mitigate the relentless downward market pressures further into September.
“Against a different set of market conditions, we were pleased to conclude a price hold at Davidstow.”
Over the last three months a lot of work has been going on behind the scenes trying to find solutions to the current crisis the industry faces.
This has involved all the farming organisations working together. It has proved to be very slow and very difficult but no one ever pretended that to find long term solutions to the industry's problems was going to be an easy one.
Unfortunately a lot of this work has not been able to be shared with you our members due to sensitivity of the complexities involved in finding answers for both the short term and long term issues facing all sectors within the British farming industry.
"We had hoped that most people would have been patient but we understand the pressures that are put on business and family when income levels have fall to an all time low, and this has brought out some frustration amongst a minority of members," said Farmers' for Action group.
"We have plans for further open meetings in the North of England, the far South West and Wales to try and give as much information as is practical to let people know, not only where we are in this current negotiation but also to hear farmers' views and ideas of how we can progress forward."
