Tesco milk group set to recruit up to 150 more dairy producers

Tesco could be looking for up to 150 additional producers to join its 600-strong Tesco Sustainable Dairy Group (TSDG).

The group currently has its prices set following a cost of production model administered by Promar. However the group’s terms are under review, due to complete by the end of November, so any offering is likely to be under revised terms.  

“As we near the end of the process, we are confident that we’ll be able to increase the number of direct relationships with our core TSDG pool farms by over a quarter by spring 2016,” said Matt Simister, Tesco’s commercial director of fresh food and commodities.

See also: Tesco launches full review of dairy farmer supply group

The retailer also announced today (29 September) that its TSDG cost of production milk price will fall by 0.35p/litre to 30.58p/litre from 1 November.

This will be paid to the 600 members of the Tesco Sustainable Dairy Group (TSDG) for the following six months and includes a 0.5p/litre supplement for those sharing their cost data with Promar.

The drop is mainly accounted for by a reduction in feed costs and covers milk for Tesco own-brand fresh and filtered milk (excluding organic), single, double and extra thick double cream products, as well as mature and extra mature cheddar. Higher milk production also contributed to a lower cost of production.

Tesco has also guaranteed its cost of production price until 28 February next year for milk which goes to make Tesco brand Mild and Medium Cheddar, Red Leicester and Double Gloucester cheeses. This is milk which is currently outside the TSDG initiative but plants making these cheeses for Tesco will receive 29.08p/litre for milk, which they are expected to pass back to producers.