Following a tumultuous summer, which saw processing plants blockaded by protesting farmers, enraged and apprehensive at the prospect of two consecutive price cuts being delivered by large processors and retailers, Dairy Crest, one of the major processing players, has announced that it is “confident of delivering higher milk prices to its farmers as the autumn progresses.”

In July, Dairy Crest announced plans to introduce cuts to farm gate milk prices which would have seen its suppliers receiving under 25 pence per litre for their milk, against estimated production costs in excess of 30ppl. In the event, the second planned price cut was averted before 1st August, when it was due to come into effect.

Then, the company, along with other processors who embarked on successive price cuts, said the cuts were in relation to falling cream prices. However, farmers accused retailers and processors of unsustainable business practices, describing the reliance on cream prices to keep the dairy sector afloat as cavalier. On Tuesday, Dairy Crest announced that recovering milk and cream markets meant prospects for pay increases are good.

On Tuesday, Dairy Crest said it had “funded the shortfall” accrued by its reversal of the planned August price cut “while discussions with other customers are ongoing [over] ways for Dairy Crest to support its farmers by paying higher milk prices.” The processor announced that, “Following discussions, Dairy Crest has requested cost price increases from customers and has agreed with representatives of its farmers, DCD, that it will reflect increases it receives in its future farmgate milk price.”

Commodity cream prices have begun to increase, a fact which Dairy Crest said would also be reflected in future farmgate prices. A Dairy Crest spokesperson said representatives of the processor will meet with the DCD later this month and “it is anticipated that increased farmgate milk prices will be announced shortly afterwards.”

Mike Sheldon, Milk Procurement Director, commented on the promising situation, “We are in no doubt about the difficulties our non-aligned farmers have been facing and are confident that all our customers are now also aware of these difficulties and many are prepared to pay more for their milk as a result. The work of the Dairy Coalition has been helpful in highlighting the issues faced by all dairy farmers but ongoing direct action puts the progress we are making at risk.

“We have agreed a transparent mechanism so our farmer representatives can see that improved returns are properly reflected in our farmgate milk prices.”

Tweet