Müller Wiseman Milk Group members are being circulated with new contracts which include, for those who receive the standard milk price, an option to link their milk price to movements in the value of global dairy commodities.

The new, stock market-linked 'Müller Wiseman Formula Price' option for dairy farmers forms part of a new contract which has been sent to all Müller Wiseman Milk Group members, the milk processor announced on Thursday. Müller said its new terms are in full accordance with the Voluntary Code of Practice, established in the wake of large-scale protests by milk producers last summer.

The new Formula Price will initially be available for nine months from 1st July 2013, for a maximum of 110 million litres. The formula will calculate a farm gate milk price using publicly available benchmarks: Actual Milk Price Equivalent (AMPE), Milk for Cheese Value Equivalent (MCVE) and a range of competitor milk prices, according to Müller. These benchmarks will be reviewed quarterly.

Müller Agricultural Affairs Manager Pete Nicholson said "The current Müller Wiseman Standard Price will remain the default for non retailer aligned suppliers to the company. But the new contract offers an additional option which addresses the desire amongst some dairy farmers for their milk price to have a direct and clear link with published dairy commodity values.

He said aligned producers would receive support from the company in weighing up their options and added that the company expects to develop an online calculator on the member's website to help producers predict trends and track movements.