Dairy Crest Direct (DCD), the group of 400 farmers which sell their milk directly to the Surrey based dairy products company, has accepted the offer. Previously, DCD had accepted a price cut as long as another one was not considered for three months.
This means the core milk price at Davidstow, Dairy Crest’s largest cheese making creamery, will remain at 21.72 pence per litre until the end of August 2016. The company said this is one of the most competitive milk prices in the UK.
Ruth Askew, head of procurement at Dairy Crest, said: “This is another sign of our confidence in the future of Dairy Crest and the wider British dairy sector. We have market leading brands, including Cathedral City, as well as our developing infant formula business which gives us access to high growth, high margin markets. Dairy Crest is well placed to continue to provide security and opportunities for growth for our supplying farmers.”
DCD chairman Steve Bone said: “We are pleased that Dairy Crest will not implement the price reduction for July. We have been asking Dairy Crest to consider their position and this is a positive step.”
Recently, NFU dairy board chairman Michael Oakes said milk supply is pulling back across the world and there are reports that dairy consumption will be bigger than the growth in production this year. “On farm we’ve seen price increases, a few price holds and although no overall change on the last global dairy trade auction, this follows two positive auctions. Some traders are concerned where they will source products for the end of the year so the right signs are there.
“However, we must remain cautious. It’s important to stress that many farmers are receiving a low price for their milk, so despite any small increases, they will still be extremely low. And how quickly we get back to a sustainable level no one knows – maybe six months or even longer. So there is still a long way to go.”