260 First Milk members get 2p/litre Tesco cheese premium

About 260 First Milk members supplying the co-op’s Haverfordwest creamery will benefit from Tesco’s promise to pay its cost-of-production milk price for cheese over the winter.

This is understood to be worth an extra 2p/litre to those members who are currently being paid just 19.37p/litre for their milk.

First Milk chose to pass the benefit to suppliers to the Pembrokeshire site because it is the only First Milk cheese plant supplying the retailer, with about 25% of its cheese going to Tesco.

See also: Tesco rolls out premium price on milk for cheese

In a statement, the farmer group said that the Tesco winter supplement would cover milk supplied between 31 August and the end of February 2016. The supplement would be itemised on farmers’ monthly milk statements.

“Tesco has a strong track record in supporting British dairy farmers and we warmly welcome this move on cheese,” said First Milk chief executive officer Mike Gallagher.

“It allows us to directly pass on the benefits to First Milk farmers who supply the milk that produces Tesco’s cheese. This move will be valued by all dairy farmers and British consumers.”

First Milk hopes that the impact of the Tesco offer will help to build momentum for other retailers to make similar moves, with the allocation of the premium to producers supplying the milk for Tesco cheese bringing transparency by showing the farmgate impact of the retailer’s price promise.

Tesco’s 600-producer Tesco Sustainable Dairy Group (TSDG) already covers liquid milk, cream, mature and extra-mature cheddar (from suppliers other than First Milk and Caernarfon creameries), paying a rate linked to the farmers’ average production costs.

The current TSDG costed price is 29.93p/litre, due for review in October with any change taking effect from 1 November.  

The milk for cheese winter offer, secured after meetings with the NFU and Farmers For Action, sees that price temporarily rolled out for Tesco’s standard mild and medium cheddar, value, standard Red Leicester and Double Gloucester.

First Milk has just over 1,000 farmer members.