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Dairy Crest looks to stabilise milk prices

Dairy Crest has announced that following a drop in its March milk price, there will be no further reductions to its farmgate milk price before July. The company says it is the first processor in the British dairy sector to introduce a ‘price floor’ that will guarantee a lengthy period of stability for its farmers. […]

Dairy Crest has announced that following a drop in its March milk price, there will be no further reductions to its farmgate milk price before July. The company says it is the first processor in the British dairy sector to introduce a ‘price floor’ that will guarantee a lengthy period of stability for its farmers.

Dairy Crest said that it hopes that, after many months of extreme volatility for the British dairy sector, this move will allow farmers to budget and plan more effectively for the spring flush and until July.

The company said that it will review the milk price on an on-going basis. In line with what Dairy Crest describes as its long-standing commitment to paying fair, market-related prices, this will enable any improvements to its milk supply and demand balance to be appropriately reflected.

“During this challenging time for British dairying, Dairy Crest is leading the industry by introducing a price floor until July,” said Mike Sheldon, Managing Director of Dairies. “We want to provide as much stability and certainty for our supplying farmers as we can. We hope that by the summer markets will have recovered and we can reflect this in our milk price to farmers. Whilst the continuing high levels of milk production in the UK have resulted in a further price cut in March, the agreement by Dairy Crest and Dairy Crest Direct to guarantee a floor for future prices will allow our farmers to plan ahead. This is crucial as we move through the peak period of milk production.”

“Whilst we hope that dairy markets will start to recover this year, it remains clear that volatility is here to stay. It is critical that the British dairy sector has the efficiency and economies of scale to deal with this global volatility going forward. That is why we continue to believe that the sale of our Dairies business to Muller Wiseman will bring some much-needed stability to the sector.”