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Dairy Crest Announces Milk Prices for December and Davidstow Milk Price Floor

29/10/2015

Liquid Milk Price

Dairy Crest has confirmed that it will hold the December milk price for its farmers on standard Liquid contracts. This has been agreed with DCD.

The average price paid to Dairy Crest’s non-aligned Liquid farmers is currently 23.3 ppl. This is a weighted average of Dairy Crest’s standard Liquid milk price, 21.69* ppl, and Dairy Crest’s Formula contract, which for November is calculated at 26.72** ppl.

Davidstow Milk Price

Dairy Crest is also announcing that there will be a reduction of 0.6ppl to the Davidstow milk price from 1 December 2015. This has been agreed with DCD. The Davidstow milk price at 24.32 ppl*** remains one of the most competitive offers to farmers in the South West.

The Davidstow milk price has consistently delivered a premium price, as well as stability, for farmers. This is only the second reduction in a 10 month period which has seen significant milk price reductions across the board.

Davidstow Milk Price Floor

As part of its on-going commitment to providing a stable milk price for supplying farmers, Dairy Crest has also agreed with DCD to  introduce a price floor for the Davidstow milk price for the three months up until the end of February 2016. This means there will be no further milk price reductions during this period. However, Dairy Crest and DCD will continue to review the milk price on a monthly basis as normal.

Ruth Askew, Head of Procurement at Dairy Crest, commented:

“Dairy Crest aims to provide a fair, stable and market-related milk price to all of our supplying farmers. In a challenging market, I am pleased that we have been able to hold our Liquid milk price for another month.  

In order for our cheese business to remain competitive, we have had to adjust the December milk price for our Davidstow contract. Whilst I realise this will be extremely disappointing news to farmers, Dairy Crest has tried to bring as much stability as possible by introducing a milk price floor until the end of February 2016. 

The milk price floor comes in recognition of the additional pressures facing farmers throughout the winter months. This provides our Davidstow farmers with a guarantee that their milk price will not reduce further during this three month period. I hope this shows our on-going commitment to our Davidstow farmers, in what continues to be a very challenging environment for the dairy sector.

This month has been transformational for Dairy Crest. The sale of our Dairies business has been approved by the CMA and will now complete on 26 December this year. As has been widely reported, this is good news for our farmers, employees, customers and consumers as it will bring some much-needed stability to the British dairy sector.

The future remains extremely bright for Dairy Crest and our supplying farmers. Our infant formula ingredients are now being commissioned and we will now have time to focus on what we do well; continuing to grow our world class brands, adding value to the supply chain and growing our business together with those of the farmers who supply us.”

* Standard litre milk prices as published in milkprices.com (liquid standard litre for Liquid contracts)

** The December Formula price is not yet calculated.  The November price is 26.72 ppl.

*** As per milkprices.com (manufacturing standard litre for Davidstow)