Dairy Crest’s decision to cut milk prices is not good news but putting a floor in the market will give farmers some stability in a very difficult cheese market, the NFU said today.
The comments come after the dairy company said it would hold its price for standard liquid contracts for December and reduce its Davidstow milk price but introduce a price floor until the end of February.
NFU dairy board chairman Rob Harrison said: “This announcement by Dairy Crest – which follows a similar move by Arla in holding its liquid milk price for November – shows some sort of stability within the market. With the winter period upon us and production costs increasing as cattle are housed, it’s good to see prices start to firm, albeit at a level that’s far too low to support a sustainable dairy industry.
“While we understand that the cheese market remains very difficult, this price cut will be devastating for affected members, but Dairy Crest has provided some stability to farmers by putting a floor in the market until the end of February. This shows the benefit of having strong producer representation, in Dairy Crest Direct, who proposed the idea for a market floor to Dairy Crest management.
“We’ve seen some moves at retail to better support milk for cheese, both in improved sourcing and pricing, but unfortunately these remain in the minority. UK retailers and other end users need to have a thorough look at their cheese sourcing policies to ensure that they are paying a fair, transparent price.
“A number of other milk buyers have announced price cuts for November and December. Processors need to clearly explain to farmers why this is the case and assure their suppliers that everything is being done to add value into the dairy market.”
