Farmers to see another cut in price of milk

Dairy Crest announced that farmers will see cuts in both June and July this year before it promises to hold its price until September 30.

The processor, which closed its manufacturing plant at Crudgington near Telford in 2015, will reduce the price it pays to its Davidstow farmers by one pence per litre from June 1, to a total of 29ppl.

A further 1ppl will be cut on July 1 before it holds the price at 28ppl until the end of September.

Chris Thomson, group procurement director at Dairy Crest, said: “To remain competitive a price reduction has regrettably become necessary. We know that our farmers need stability and certainty for the future.

"That is why we have spread the reduction over two months and agreed the price level for the next four months.

"This latest announcement builds on our actions at the end of last year when we responded quickly to the changing market environment through a series of significant price increases, followed by a hold for the last three months.”

Dairy Crest has previously announced a 2ppl milk price increase in January, and again in February before holding it for the last three months.

Dairy Crest Direct chairman Steve Bone added: “It has been difficult to agree a milk price reduction.

"Whilst negotiating we believed that it was very important to put in place a period of stability which protects us as producers through a period where milk volumes are increasing, which is having an impact on dairy markets.”

David Handley, chairman of Farmers For Action, has previously called on the Government to intervene in the dairy supply chain and make sure farmers are benefitting from money made at the top.

Mr Handley said average losses for dairy farms has been as much as £90,000 over the last two years.

He said: "Obviously I am totally disappointed that again we have got another milk processor droppint the price when the industry is so fragile.

"But saying that, 28ppl currently is covering the cost of production, which is something we have always said we want.

"On one hand this is disappointing, but on the other at least it is not falling even lower than that.

"Most of the milk processors are hovering around that price at the moment, from 26 to 28ppl.

"However a number of analysts have written reports on the industry and found that for farmers to get back on their feet after the last two years, we need to be seeing 35ppl.

"That is just to come back to normality. It is a massive number but when you think we got right down to 12ppl at some points and that was a period of nearly six months.

"So this latest cut, of course I am disappointed, but I am pleased it is not below the 28ppl mark."