Dairy Crest is announcing the following price positions for September:

• 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 Davidstow contract remains one of the most competitively priced for farmers in the South West

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:

“We have worked extremely hard to deliver six months of stability to our farmers during very challenging market conditions¬. 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.”

Dairy prices have fallen for the ninth consecutive time and suffered the largest decline of the year at the latest GlobalDairyTrade auction held on 15th July.

* The Davidstow price is expressed on a Manufacturing standard litre basis according to milkprices.com. On the milkprice.com Liquid standard litre this is equivalent to 25.34ppl.

** Price expressed on a Liquid standard litre basis, according to milkprices.com.